5 U.S.C. § 553: Patent Elephants in Process Mouseholes

The University of New Hampshire Law Review Volume 8 Number 1 Pierce Law Review Article 5 December 2009 5 U.S.C. § 553: Patent Elephants in Process Mouseholes Thomas G. Field Franklin Pierce Law Center, Concord, NH Follow this and additional works at: https://scholars.unh.edu/unh_lr Part of the Intellectual Property Law Commons Repository Citation Thomas G. Field, 5 U.S.C. § 553: Patent Elephants in Process Mouseholes, 8 Pierce L. Rev. 81 (2009), available at http://scholars.unh.edu/unh_lr/vol8/iss1/5 This Comments is brought to you for free and open access by the University of New Hampshire – School of Law at University of New Hampshire Scholars' Repository. It has been accepted for inclusion in The University of New Hampshire Law Review by an authorized editor of University of New Hampshire Scholars' Repository. For more information, please contact . File: Field Mouseholes Final II.doc Created on: 12/21/09 10:58 AM Last Printed: 12/21/09 10:58 AM 5 U.S.C. § 553: Patent Elephants in Process Mouseholes THOMAS G. FIELD, JR.* As the district court in Tafas v. Duda (Tafas I)1 recounted, in 2006, the U.S. Patent and Trademark Office (USPTO) proposed to limit numbers of continuing patent applications, requests for continued examination, and claims that could be made as a matter of right.2 In 2007, following notice and comment procedures that generated hundreds of comments, many critical, the USPTO published final rules consonant with those objectives.3 The district court in Tafas I issued a preliminary injunction4 and ultimately rejected those rules, saying “[b]ecause the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because 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.’”5 Had the rules been seen as procedural, the court would have been forced to address several other issues that are discussed below. In* Founding Professor of Law, Franklin Pierce Law Center. Field holds an A.B. in chemistry and J.D. from West Virginia University. He also holds an L.L.M. in Trade Regulation from New York University. During a break from law school, he examined alkene polymer blends in what was then the Patent Office. Since he began teaching in 1970, Field has taught both administrative process and intellectual property law, often more than once in the same academic year. 1. 541 F. Supp. 2d 805 (E.D. Va. 2008), appeal dismissed per stipulation sub nom. Tafas v. Kappos, No. 2008-1352, 2009 WL 3806451 (Fed. Cir. Nov. 13, 2009). On October 8, 2009, the USPTO issued Press Release 09-21, stating: “We are grateful to GlaxoSmithKline for working with us to file [a] joint motion to both dismiss the appeal and vacate the district court’s decision.” Press Release, United States Patent and Trademark Office, USPTO Rescinds Controversial Patent Regulations Package Proposed by Previous Administration (Sept. 21, 2009), available at http://www.uspto.gov/news/09_21.jsp. 2. Tafas I, 541 F. Supp. 2d at 809. 3. Id. 4. Id. at 810. 5. Id. at 817 (alteration in original) (quoting 5 U.S.C. § 706(2) (2006)). 81 File: Field Mouseholes Final II.doc 82 Created on: 12/21/09 10:58 AM PIERCE LAW REVIEW Last Printed: 12/21/09 10:58 AM Vol. 8, No. 1 stead, it wrote “because the Court believes that one who judges least judges best, it will not reach the other issues raised by the parties, resting instead on the determination of a single dispositive issue,”6 i.e., that the rules are substantive and beyond the USPTO’s rulemaking authority. That authority, previously contained in 35 U.S.C. §§ 6(a)7 and 31,8 is currently set out in § 2(b)(2).9 Subsections 2(b)(2)(A) and (D) clearly correspond respectively to those earlier provisions. What subparagraphs C, E, and F contribute is unclear, but only § 2(b)(2)(B) is of interest here. The USPTO apparently argued that, because of reference to § 553, the rulemaking provision of the Administrative Procedure Act (APA),10 subsection B confers general authority to make rules.11 6. Id. at 811. 7. See Merck & Co. v. Kessler, 80 F.3d 1543, 1549–50 (Fed. Cir. 1996). 8. See Sperry v. Florida ex rel Fla. Bar, 373 U.S. 379, 403–04 (1963). 9. (b) Specific powers.–The [USPTO] . . . (2) may establish regulations, not inconsistent with law, which– (A) shall govern the conduct of proceedings in the [USPTO]; (B) shall be made in accordance with section 553 of title 5; (C) shall facilitate and expedite the processing of patent applications, . . . subject to the provisions of section 122 relating to the confidential status of applications; (D) may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the [USPTO], and may require them, before being recognized as representatives of applicants or other persons, to show that they are of good moral character and reputation and are possessed of the necessary qualifications to render to applicants or other persons valuable service, advice, and assistance in the presentation or prosecution of their applications or other business before the [USPTO]; (E) shall recognize the public interest in continuing to safeguard broad access to the United States patent system through the reduced fee structure for small entities . . . ; and (F) provide for the development of a performance-based process . . . for evaluating cost-effectiveness and is consistent with the principles of impartiality and competitiveness . . . . 35 U.S.C. § 2(b)(2). 10. Courts sometimes refer to section numbers of the original Act, but the APA was repealed and enacted as positive law by the Act of Sept. 6, 1966, Pub. L. No. 89-554, 80 Stat. 378. It would have been helpful had original numbering been File: Field Mouseholes Final II.doc 2009 Created on: 12/21/09 10:58 AM Last Printed: 12/21/09 10:58 AM PATENT ELEPHANTS IN PROCESS MOUSEHOLES 83 The argument seems to be based on the idea that reference to § 553 would be unnecessary because § 553(b) exempts procedural rules.12 Under that view, authors of 35 U.S.C. § 2(b)(2)(B) must have had substantive rules in mind.13 This would, however, ignore subsection D, which authorizes substantive standards to govern all who practice before the USPTO.14 Rules governing practice not being considered, the court pointed out that, with one arguable exception,15 courts have never acknowledged what might be seen as substantive rulemaking authority in the USPTO.16 Moreover, in Merck, the Federal Circuit denied it.17 Because the court in that case had no reason to consider the rules of practice, it was able to state: [T]he broadest of the [USPTO’s] rulemaking powers—35 U.S.C. § 6(a)—authorizes the Commissioner to promulgate regulations directed only to “the conduct of proceedings in the [USPTO]”; it does NOT grant the Commissioner the authority to issue substantive rules. Because Congress has (...truncated)