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A federal court in Virginia on Tuesday issued a ruling declaring that sweeping U.S. Patent and Trademark Office rule changes published last August are invalid. The controversial rules published on Aug. 21 limited the number of patent claims on patent applications in most cases and the number of continuing patent applications, which are subsequent applications for the same invention. Continuing applications are filed before the first application is patented or abandoned. The new rules were meant to speed up the processing of patents and clear the Patent Office’s backlog of filings. On April 1, Judge James C. Cacheris of the Eastern District of Virginia issued a 26-page opinion saying that the Patent Office’s final rules “exceed the scope of the USPTO’s rulemaking authority.” Tafas v. Dudas, No. 07-00846 (E.D. Va.). Cacheris’ summary judgment ruling follows an Oct. 31 temporary injunction that stopped the rules from taking effect on Nov. 1. Inventor Triantafyllos Tafas filed the lawsuit challenging the Patent Office’s rules on Aug. 22, the day after the agency issued them. The Tafas suit called the new rules unconstitutional because the U.S. Patent and Trademark Office didn’t consider their impact on the “promotion of science and the useful arts.” The suit also claimed that the rules were overly burdensome and exceeded the agency’s rulemaking authority. A separate suit filed by SmithKline Beecham Corp. was consolidated with the Tafas case. SmithKline Beecham Corp. v. Dudas, No. 1:07-cv-1008. No substantive changes Cacheris interpreted the law as allowing the agency to make only procedural rules and not substantive ones that “change existing law and alter the rights of applicants.” “This reading [of the law] is further supported by the fact that, since 2005, Congress has debated and considered whether it should grant the USPTO substantive rulemaking authority but has declined to do so,” wrote Cacheris. Cacheris also wrote that the USPTO’s “attempt to abolish the substantive-procedural distinction” fail because “the balance of the case law in the [U.S. Court of Appeals for the] Federal Circuit and the Supreme Court indicates that the distinction exists, and that it is pertinent to this dispute.” The Patent Office is disappointed with the court’s decision, which rejects its view that the agency is authorized to implement the proposed rules, said spokeswoman Jennifer Rankin Byrne, in a statement. “The USPTO believes that these rules are consistent with existing statutes and will strengthen the U.S. patent system for all stakeholders,” Byrne said. “While considering next steps, our goal remains the same as it has always been: to improve the quality of the intellectual property system for the benefit of all.” The decision “provides great relief to the patent community,” said Steven Moore a Stamford, Conn. lawyer at New York’s Kelley Drye & Warren on the plaintiffs’ side of the case. “An adverse ruling would have had a profound negative effect on patent practice, and innovation in general, and certainly would have boded even more extreme regulations being promulgated by the USPTO in the future,” Moore said. Biotechnology Industry Organization president and CEO Jim Greenwood said that the order highlights the need for a viable solution to the patent office’s workload hurdles. “We stand ready to work with the PTO to develop an approach that fairly allocates responsibility for patent quality between patent applicants and patent examiners and enhances the strength and integrity of the American patent system, while not stifling innovation or placing a disproportionate burden on any one industry,” Greenwood said.

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