Pharma Opposes PTO’s Proposed Rules on Patent Appeals Process

The pharmaceutical industry is once again objecting to rules proposed by the Patent and Trademark Office.

This time around, the agency is seeking to impose new requirements for filing appeals to the PTO's Board of Patent Appeals and Inferences. The PTO says the rules would make it easier for examiners and reviewers to process an ever-growing number of ex parte appeals, in which members of the public challenge an issued patent but do not participate in reexamination proceedings.

But several companies, including Lilly, Wyeth, Amylin, IBM and Microsoft, contend that the proposed rules would require patent owners to supply an extensive amount of unnecessary information, impeding their ability to argue their case.

Under the new rules, patent owners would have to file a "statement of facts" relevant to the rejection of an application on appeal; identify arguments they have previously presented; and provide an annotated copy of any claim whose patentability is to be argued.

In addition, the proposed rules place a 25-page limit on the appeal brief and require that it be in 14 point font with double-line spacing.

The PTO announced the proposed rules in July and numerous companies and organizations submitted comments at the end of September. They are the latest in a series of proposed rules the agency has put forth to improve the review and appeals process.

The most contentious rules would have limited the number of continuation and continuation-in-part applications an inventor can submit to the PTO. But GlaxoSmithKline succeeded in halting implementation of the rules when it won a temporary restraining order and preliminary injunction earlier this month (¹ , p. 28).

The agency said the continuation rules were necessary to rein in the number of continuing applications, which add new claims or disclosures to an original application. Patent lawyers predict that applicants who are unable to file continuations will instead file appeals.

In announcing the proposed appeals rules, the PTO cited the growing number of ex parte appeals. In fiscal year 2006 the agency received 3,349 ex parte appeals and the board expects to receive more than 4,000 such appeals in fiscal year 2007 and more than 5,000 the following year.

Lilly said it understood the PTO's goal was to provide examiners and the board with a clear and complete statement of an appellant's position. "Nevertheless, it appears the office is shifting responsibilities from the board to the appellant, making the filing of an appeal brief overly burdensome for the appellant."

The company said that requiring appellants to provide evidence already in the record may result in the introduction of inadvertent errors that could expose the appellant to charges of inequitable conduct in later proceedings. Lilly also argued that the 25-page limit for the appeal brief may not allow appellants to fully present their case.

Amylin said the requirement for a statement of facts will require appellants to provide a long and detailed list of every fact necessary to support their positions.

"There seems to be no good reason to burden appellants with a new requirement which could easily double the cost of any appeal, especially where the added information in the record would, in many instances, be of limited, if any, value," Amylin said.

The proposed rules would also impose sanctions against an appellant for misconduct, including: "failure to comply with an order entered in the appeal or an application rule"; "advancing or maintaining a misleading or frivolous request for relief or argument"; and "engaging in dilatory tactics."

Wyeth objected to this provision, saying it is completely unclear what constitutes a frivolous request or dilatory tactics. "The imposition of sanctions should be limited to cases where intent or willfulness is shown," Wyeth stated, "and appellants should be provided an opportunity to argue against any sanction prior to its imposition."

- Brenda Sandburg ([email protected])