Public Comments Criticize USPTO's Proposed Rules For "Routine Discovery," "Patentee Estoppel," and Amendments in Board Trial Proceedings

As I previously pointed out, there are three proposed rules in the USPTO’s patent trial proceedings rules package that raise concerns and should be dropped.  Public comments on these proposed rules were due April 9-10, 2012.  Now that the public has spoken, let’s take a look at what people had to say about these three specific proposals.

 I.   Proposed Rule 37 CFR § 42.51(b)(3) – Routine discovery of inconsistent information

Perhaps the rule that generated the biggest public outcry is the USPTO’s proposal to impose a pre-Therasense duty of disclosure on all parties in patent trials by requiring them to submit “noncumulative information that is inconsistent with a position advanced by the patent owner or petitioner during the proceeding” and further requiring the party submitting the information to “specify the relevance of the information, including where the information is presented in a document and, where applicable, how the information is pertinent to the claims.”  Proposed Rule 37 CFR § 42.51(b)(3).  Public reaction to this proposal was strongly negative:

• Bruce Stoner (former Chief Judge, BPAI, 1995-2003): “THE PTO SHOULD NOT ADOPT 37 CFR § 42.51(b)(3)….  [T]he effect of the underlined language regarding ‘inconsistent’ noncumulative information appears to me to impose an additional duty of disclosure beyond that imposed in the rule addressing this matter, specifically 37 CFR § 1.56. Having a separate duty embedded in the discovery rules appears unwise to me.”
• ABA-IPL, AIPLA and IPO: “The Committee cautions against the adoption of disclosure obligations that may give rise to disputes in subsequent litigation over subjective determinations, such as whether undisclosed information was ‘cumulative’ or ‘inconsistent’ with a position advanced by a party; or if the information was disclosed, whether its ‘relevance’ was properly or adequately explained.”
• Microsoft: “We believe that such an affirmative disclosure mandate will be unduly burdensome on the patent owner and result in the type of unnecessary, ancillary disputes that are frequently seen in the federal district courts.”
• Genentech: “A positive obligation to discover information contrary to one’s position is incompatible with an adversarial proceeding, and would impose an unreasonably broad and difficult to satisfy obligation.”
• Association of Corporate Counsel: “This requirement goes beyond the Rule 1.56 duty of candor and conflicts with the practitioner’s duty zealously to advocate for his client. This conflict places the practitioner in a tenuous position between his ethical obligations to his client and the PTO’s requirement that he articulate positions that contradict the positions of his client.”

 II.   Proposed Rule 37 CFR § 42.73(d)(3) – Estoppel against patent applicant or owner

I had pointed out that the USPTO’s proposed “Estoppel against patent applicant or owner” rule (37 CFR § 42.73(d)(3)) lacks any apparent statutory basis in the AIA.  Unlike the statutory estoppel provisions that apply against petitioners in post-grant and inter partes review proceedings, the USPTO’s proposal would estop patent owners and applicants from ”from taking action inconsistent with the adverse judgment, including obtaining in any patent: (i) A claim to substantially the same invention as the finally refused or cancelled claim; (ii) A claim that could have been filed in response to any properly raised ground of unpatentability for a finally refused or cancelled claim; or (iii) An amendment of a specification or of a drawing that was denied during the trial proceeding.”  Proposed 37 CFR § 42.73(d)(3).  The public’s response to this proposal is negative:

• Bruce Stoner (former Chief Judge, BPAI, 1995-2003): “[H]owever necessary such provisions may be to preserve a uniform set of consequences to all parties, these provisions appear to not be warranted by the existing statute. Presumably, the PTO has proposed this rule as an analogy to interference estoppel (briefly summarized in MPEP § 2308.03). I think it is not quite so clear that the case law of interferences will be adopted. Seeking amendment of the law seems preferable to me.”
• ABA-IPL, AIPLA and IPO: “This rule, nowhere authorized in the AIA, would be unfair to patent owners. It also appears to exceed the PTO’s rulemaking authority. See Tafas v. Doll, 559 F.3d at 1352.”
• IEEE: “The Umbrella Rule imposes an estoppel beyond that authorized by statute…. [B]y statute, 35 U.S.C. § 120, an applicant that is entitled to file a continuation application is entitled to all rights arising in that application. The USPTO cannot by regulation attenuate this statutory right.”
• IBM: “The rule is troubling since it raises the specter of foreclosing closely related claims in (for example) continuation or parent applications based on the PTO’s determination of whether those claims might be considered to be ‘substantially the same invention’, or might have been filed in the inter partes review.”
• PhRMA: “Contrary to the proposed rules, no estoppels against presenting different claims in a later continuation should arise against a patent owner. This rule, nowhere authorized in the AIA, could be grossly unfair to patent owners.”

My colleagues Courtenay Brinckerhoff and Max Colice have described a scenario that highlights some potential consequences of this rule, and the inequities that could arise if the same prior art is cited in a patent trial proceeding as opposed to during prosecution.

III.   Proposed 37 CFR § 42.121/42.221 – Amendments

Comments also were filed in connection with USPTO’s proposed rules governing patent owners’ motions to amend claims in both inter partes and post-grant review.   As proposed, the rules would require patent owners to “confer[] with the Board” prior to filing a motion to amend the patent, and such motion would be procedurally denied if “(1) The amendment does not respond to a ground of unpatentability involved in the trial; or (2) The amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter.”  Proposed 37 CFR § 42.121/42.221.  Here is what commenters had to say:

• PhRMA: “[B]ecause the first motion to amend is by right, there should be no burden to ‘confer’ with the Board.”
• Intellectual Ventures: “Because questions of enlarged claim scope and new matter are substantive questions that arise under statutory provisions, amendments raising such questions should not be procedurally denied, but rather entered and substantively rejected so that the questions can be appropriately reviewed.”
• AIPLA: “Certain aspects of the proposed rules directed to amended claims are not required by the text of the AIA, and may be viewed as not entirely consistent with the statutory language. For example, the Office’s proposed rules state that a motion to amend the patent will not be granted where ‘the amendment does not respond to a ground of unpatentability involved in the trial.’ . . . . [T]his restriction is not found in the text of the AIA.”
• Abbott Laboratories: “[T]he AIA expressly allows a patent owner to file one motion to amend as of right – that is, without permission from the Board. Compare 35 U.S.C. §316(d)(1) with 35 U.S.C. §316(d)(2). This rule suggests that a patent owner has a burden in relation to its first motion to amend, beyond what is expressly stated in the statute.” 

What Will the USPTO Do?

I am hopeful that the USPTO will heed the public’s well-reasoned comments and simply drop these three proposals. According to a statement by Janet Gongola, Patent Reform Coordinator for the USPTO, “[t]he agency will respond to the comments in the aggregate” when it publishes the Notices of Final Rules, which it plans to do “by August 16, 2012.” Because the rules must take effect on September 16, 2012, when the new patent trial proceedings become available under the AIA, the USPTO’s timetable may leave us only 30 days to study the final rules and devise appropriate strategies.