Controversial New Patent Rules Blocked

The new patent rules, which were criticized as stifling American innovation by limiting the scope of patent protection to inventors, were set to go into effect on November 1, 2007. The day before, pharmaceutical company GlaxoSmithKline won a preliminary injunction against the U.S. Patent and Trademark Office (“PTO”), temporarily blocking the implementation of the new patent rules. The patent rules were largely criticized in solicited commentary to the PTO because the new rules would increase the cost of seeking patent protection and limit the rights of applicants.

The new rules limited the number of “claims” that an applicant could file, thereby limiting the scope of protection afforded an invention. Also, the new rules limited the number of “continuation” applications that could be filed as an offshoot of an original application. Continuation applications are very common in the pharmaceutical industry because, after conducting tests, new information is discovered that needs to be added to the original application via a continuation application.

In the written ruling blocking the PTO’s implementation of the new rules, Judge James Cacheris, of the U.S. District Court for the Eastern District of Virginia, stated that Glaxo raises:

• “serious concerns as to whether the Final Rules comport with the Patent Act;” and
• “serious concerns as to whether a reasonably prudent person would be able to comply with the [Examination Support Document] requirements.”

Click here to read the order

The PTO itself states that the cost of preparing an examination support document will “only” be in the range of “$2,563 to $13,121” and that additional expense is “not expected to result in a significant impact” on small entities. In the practical world, having represented independent inventors and start-ups, that additional expense will either dissuade inventors from filing additional claims that sufficiently protect their inventions or force them to abandon the notion of patent protection. The loss of patent protection negatively impacts innovation because without patent protection, there is no incentive to invest in research and development.

The court battle will now move to the summary judgment stage, where Glaxo will ask the court to permanently block the new rules. The summary judgment hearing is currently scheduled for December. But during oral arguments, the PTO indicated that it will attempt to continue the hearing date.