Tafas v. Dudas et al

Filing 252

Memorandum in Opposition re 126 MOTION for Summary Judgment Against the "GlaxoSmithKline" Plaintiffs filed by SmithKline Beecham Corporation, SmithKline Beecham PLC, Glaxo Group Limited. (Attachments: # 1 Exhibit 27)(Reilly, Craig)

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division ____________________________________ : : : Plaintiff, : : v. : : JON W. DUDAS, et al., : : Defendants. : ____________________________________: TRIANTAFYLLOS TAFAS,

1:07cv846 (JCC/TRJ)

CONSOLIDATED WITH ____________________________________ : SMITHKLINE BEECHAM : CORPORATION, : d/b/a GLAXOSMITHKLINE, et al., : : Plaintiffs, : : v. : 1:07cv1008 (JCC/TRJ) : JON W. DUDAS, et al., : : Defendants. : ____________________________________: GLAXOSMITHKLINE'S OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AGAINST THE "GLAXOSMITHKLINE" PLAINTIFFS

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES ........................................................................................................ III TABLE OF ABBREVIATIONS FOR CITATIONS TO COURT FILINGS ............................. XII I. II. INTRODUCTION. ..............................................................................................................1 THE PTO'S MOTION MUST BE DENIED BECAUSE GSK IS ENTITLED TO JUDGMENT AS A MATTER OF LAW ON ALL CAUSES OF ACTION. .....................4 A. The PTO Lacks Substantive Rulemaking Authority, Cannot Promulgate Rules Inconsistent With Established Law, And Is Entitled To No Deference When It Attempts To Do So...................................................................4 The Arbitrary And Mechanical Limit On Continuing Applications In Final Rule 78 Is Contrary To Established Patent Law....................................................12 1. 2. C. D. Final Rule 78 Is Inconsistent With The Plain Language Of Section 120..............................................................................................................12 The Doctrine Of Prosecution Laches Does Not Save Rule 78. .................15

B.

Final Rule 114 Is Inconsistent With Section 132...................................................17 Final Rules 75 And 265 Are Inconsistent With The Patent Act. ...........................19 1. 2. Final Rules 75 And 265 Are Inconsistent With The Plain Language Of Section 112, Paragraph 2. .....................................................................19 Final Rule 265 Unlawfully Requires An Applicant To Conduct A Prior Art Search And Unlawfully Shifts The Burden Of Prosecution From The PTO To The Applicant..........................................22

E.

The ESD's Preexamination Search Requirement Is Incomprehensibly Vague And Fails To Provide Sufficient Notice As To How To Comply. .............24 1. 2. The Final Rules Must Be Stricken Under The Fair Notice Doctrine.........24 Final Rule 265 Is Fatally Vague. ...............................................................27

F.

The Final Rules Are Retroactive And Unlawful Under Bowen.............................28 1. The Retroactive Effect Of The Final Rules Is Not Diminished By Characterizing The Rules As "Procedural." ..............................................29

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2. 3. G.

The Final Rules Would Impair Rights Applicants Possess Under The Current Patent Regime........................................................................30 The Final Rules Unlawfully Impose New Duties With Respect To Completed Transactions.............................................................................33

The PTO's Failure To Adequately Consider The Final Rules' Taking Of Constitutionally Protected Property Rights In Patent Applications Was Arbitrary, Capricious, And Contrary To Law........................................................35 1. 2. 3. Property Rights Or Property Interests Clearly Exist In Patent Applications. ..............................................................................................35 The PTO Acted Arbitrarily And Capriciously In Failing To Sufficiently Address Takings Issues During Rulemaking. ........................36 The PTO's Arguments Show It Improperly Refused To Undertake Analysis Under The Lucas Category Of Takings And That It Arbitrarily And Capriciously Analyzed Penn Central Balancing Issues..........................................................................................................37

H. I. III.

Final Rule 75's Limits On The Number Of Total And Independent Claims Is Not A Logical Outgrowth Of The PTO's Proposed Rule 75.............................39 The Final Rules Are Arbitrary And Capricious In Numerous Respects................42

CONCLUSION..................................................................................................................45

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TABLE OF AUTHORITIES Page(s) Cases A.T. Massey Coal Co. v. Holland, 472 F.3d 148 (4th Cir. 2006) .............................................................................................. 6 Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990).................................................................................................... 1, 5, 6 Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024 (Fed. Cir. 2007)........................................................................................... 9 Am. Bar Ass'n v. FTC, 430 F.3d 457 (D.C. Cir. 2005) ............................................................................................ 9 Am. Coke & Coal Chems. Inst. v. EPA, 452 F.3d 930 (D.C. Cir. 2006) .......................................................................................... 41 Animal Legal Def. Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991)....................................................................................... 4, 10 Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000) ........................................................................................ 28 Ariz. Pub. Serv. Co. v. EPA, 211 F.3d 1280 (D.C. Cir. 2000) ........................................................................................ 41 ASG Indus., Inc. v. CPSC, 593 F.2d 1323 (D.C. Cir. 1979) ........................................................................................ 44 Atchison, Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437 (7th Cir. 1994), aff'd sub nom. Bhd. of Locomotive Eng'rs v. Atchison, Topeka & Santa Fe R.R. Co., 516 U.S. 152 (1996)..................................................................... 6, 8 Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87 (1983)............................................................................................................ 44 BellSouth Telecomm., Inc. v. Southeast Tel., Inc., 462 F.3d 650 (6th Cir. 2006) ............................................................................................ 30 Bergerco Canada, Div. of Conagra, Ltd. v. Treasury Dep't, 129 F.3d 189 (D.C. Cir. 1997) .......................................................................................... 31

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Bethlehem Steel Corp. v. OSHRC, 573 F.2d 157 (3d Cir. 1978).............................................................................................. 26 Bhd. of Locomotive Eng'rs v. Atchison, Topeka & Santa Fe R.R. Co., 516 U.S. 152 (1996)........................................................................................................ 6, 8 Brand v. Miller, 487 F.3d 862 (Fed. Cir.), cert. denied, 128 S. Ct. 650 (2007) ............................................................................... 9, 11 Brown & Williamson Tobacco Corp. v. FDA, 153 F.3d 155 (4th Cir. 1998), aff'd, FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000)............................................................................................................ 9 Brown v. Angelone, 150 F.3d 370 (4th Cir. 1998) ............................................................................................ 29 Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs., Ltd., 394 F.3d 1348 (Fed. Cir. 2005)......................................................................................... 24 Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (1962).......................................................................................................... 33 Centigram Commc'ns Corp. v. Lehman, 862 F. Supp. 113 (E.D. Va. 1994) .................................................................................... 10 Chadmoore Commc'ns, Inc. v. FCC, 113 F.3d 235 (D.C. Cir. 1997) .......................................................................................... 31 Chancellor Manor v. United States, 331 F.3d 891 (Fed. Cir. 2003)........................................................................................... 38 Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)............................................................................................................ 1 Chocolate Mfrs. Ass'n of U.S. v. Block, 755 F.2d 1098 (4th Cir. 1985) .......................................................................................... 42 Chrysler Corp. v. Brown, 441 U.S. 281 (1979)...................................................................................................... 4, 26 Church v. Attorney Gen. of Va., 125 F.3d 210 (4th Cir. 1997) ............................................................................................ 29 Cole v. Young, 351 U.S. 536 (1956).......................................................................................................... 25

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Combs v. Comm'r of Soc. Sec., 459 F.3d 640 (6th Cir. 2006) ...................................................................................... 29, 30 Conway v. White, 292 F. 837 (2d Cir. 1923) ................................................................................................. 36 Ctr. for Biological Diversity v. NHTSA, 508 F.3d 508 (9th Cir. 2007) ............................................................................................ 43 D&W Food Ctrs., Inc. v. Block, 786 F.2d 751 (6th Cir. 1986) ............................................................................................ 26 Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005)................................................................................... 21, 22 Diamond Roofing Co. v. OSHRC, 528 F.2d 645 (5th Cir. 1976) ............................................................................................ 26 Dickinson v. Zurko, 527 U.S. 150 (1999)........................................................................................................ 7, 8 Eli Lilly & Co. v. Bd. of Regents of Univ. of Wash., 334 F.3d 1264 (Fed. Cir. 2003)........................................................................................... 9 Envtl. Integrity Project v. EPA, 425 F.3d 992 (D.C. Cir. 2005) .................................................................................... 39, 41 Ex Parte Hull, 191 U.S.P.Q. 157 (Pat. & Tr. Office Bd. App. 1975)....................................................... 17 Exxon Chem. Patents, Inc. v. Lubrizol Corp., 935 F.2d 1263 (Fed. Cir. 1991)......................................................................................... 32 Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985).......................................................................................................... 32 FMC Corp. v. Hennessy Indus., Inc., 836 F.2d 521 (Fed. Cir. 1987)........................................................................................... 23 Frazier v. Roessel Cine Photo Tech., Inc., 417 F.3d 1230 (Fed. Cir. 2005)......................................................................................... 23 Freeman United Coal Mining Co. v. Fed. Mining Safety & Health Review Comm'n, 108 F.3d 358 (D.C. Cir. 1997) .......................................................................................... 25 Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995) .................................................................................... 26, 28

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GlaxoSmithKline v. Dudas, 511 F. Supp. 2d 652 (E.D. Va. 2007) ........................................................................ passim Hakim v. Cannon Avent Group, PLC, 479 F.3d 1313 (Fed. Cir.), cert. denied, 128 S. Ct. 391 (2007) ................................................................................... 14 Hodge v. West, 155 F.3d 1356 (Fed. Cir. 1998)........................................................................................... 5 Hyatt v. Dudas, 492 F.3d 1365 (Fed. Cir. 2007)......................................................................................... 24 In re Van Ornum, 686 F.2d 937 (C.C.P.A. 1982) .......................................................................................... 11 In re Bogese II, 303 F.3d 1362 (2002)............................................................................................ 14, 15, 16 In re Chandler, 319 F.2d 211 (C.C.P.A. 1963) .......................................................................................... 21 In re Clark, 97 F.2d 628 (C.C.P.A. 1938) ............................................................................................ 21 In re Flint, 411 F.2d 1353 (C.C.P.A. 1969) ........................................................................................ 20 In re Henriksen, 399 F.2d 253 (C.C.P.A. 1968) ............................................................................ 2, 7, 16, 17 In re Hogan, 559 F.2d 595 (C.C.P.A. 1977) ...................................................................................... 7, 17 In re Oetiker, 977 F.2d 1443 (Fed. Cir. 1992)......................................................................................... 24 In re Rouffet, 149 F.3d 1350 (Fed. Cir. 1998)......................................................................................... 23 In re Rubinfield, 270 F.2d 391 (C.C.P.A. 1959) .................................................................................... 21, 22 In re Sang Su Lee, 277 F.3d 1338 (Fed. Cir. 2002)......................................................................................... 33 In re Wakefield, 422 F.2d 897 (C.C.P.A. 1970) ...................................................................................... 2, 21

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In re Warner, 379 F.2d 1011 (C.C.P.A. 1967) ........................................................................................ 23 INS v. Orlando Ventura, 537 U.S. 12 (2002)............................................................................................................ 32 INS v. St. Cyr, 533 U.S. 289 (2001).................................................................................................... 29, 31 Int'l Union, United Mine Workers v. Mine Safety & Health Admin., 407 F.3d 1250 (D.C. Cir. 2005) .................................................................................. 39, 42 ITT Indus., Inc. v. NLRB, 413 F.3d 64 (D.C. Cir. 2005) .............................................................................................. 6 Johnson & Johnston Assocs., Inc. v. R.E. Serv. Co., 285 F.3d 1046 (Fed. Cir. 2002)......................................................................................... 14 Keen, Inc. v. Gecker, 264 F. Supp. 2d 659 (N.D. Ill. 2003) ................................................................................ 36 Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988)........................................................................................... 13 Kothman Enters., Inc. v. Trinity Indus., Inc., 455 F. Supp. 2d 608 (S.D. Tex. 2006) .............................................................................. 16 La. Pub. Serv. Comm'n v. FCC, 476 U.S. 355 (1986)............................................................................................................ 9 Lacavera v. Dudas, 441 F.3d 1380 (Fed. Cir. 2006), cert. denied, 127 S. Ct. 1246 (2007) ................................................................................. 10 Landgraf v. USI Film Prods., 511 U.S. 244 (1994)................................................................................................... 29, 30 Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992)............................................................................................................ 6 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)........................................................................................................ 37 Martin v. Hadix, 527 U.S. 343 (1999).................................................................................................... 29, 33 Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996).................................................................................... passim

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Minka Lighting, Inc. v. Craftmade Int'l, Inc., No. 00-CV-0888, 2001 WL 1012685 (N.D. Tex. Aug. 20, 2001).................................... 22 Morall v. DEA, 412 F.3d 165 (D.C. Cir. 2005) .......................................................................................... 44 Morganroth v. Quigg, 885 F.2d 843 (Fed. Cir. 1989)........................................................................................... 10 Motor Vehicles Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983)................................................................................................ 19, 37, 44 Nat'l Wildlife Fed'n v. ICC, 850 F.2d 694 (D.C. Cir. 1988) .................................................................................... 36, 37 Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005)............................................................................................................ 6 New York State Bar Ass'n v. FTC, 276 F. Supp. 2d 110 (D.D.C. 2003) .................................................................................... 9 Novozymes A/S v. Genencor Int'l, Inc., 446 F. Supp. 2d 297 (D. Del. 2006).................................................................................. 16 Nyeholt v. Sec'y of the Veterans Affairs, 298 F.3d 1350 (Fed. Cir. 2002)................................................................................... 26, 27 Omnipoint Corp. v. FCC, 78 F.3d 620 (D.C. Cir. 1996) ............................................................................................ 41 Owner-Operator Indep. Drivers Ass'n v. Fed. Motor Carrier Safety Admin., 494 F.3d 188 (D.C. Cir. 2007) .......................................................................................... 44 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978).................................................................................................... 37, 38 Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372 (Fed. Cir. 2001)........................................................................................... 5 Pine Tree Med. Assocs. v. Sec'y of Health & Human Servs., 127 F.3d 118 (1st Cir. 1997)............................................................................................. 31 Prill v. NLRB, 755 F.2d 941 (D.C. Cir. 1985) ............................................................................................ 7 Prof'l Pilots Fed'n v. FAA, 118 F.3d 758 (D.C. Cir. 1997) .......................................................................................... 37

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Radio Athens, Inc. v. FCC, 401 F.2d 398 (D.C. Cir. 1968) .......................................................................................... 26 Rollins Envtl. Servs. (NJ) Inc. v. EPA, 937 F.2d 649 (D.C. Cir. 1991) .......................................................................................... 28 Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)................................................................................................ 3, 31, 35 Ry. Labor Execs. Ass'n v. Nat'l Mediation Bd., 29 F.3d 655 (D.C. Cir. 1994) ............................................................................................ 12 Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250 (10th Cir. 2001) .......................................................................................... 9 Satellite Broad. Co. v. FCC, 824 F.2d 1 (D.C. Cir. 1987) .................................................................................. 25, 26, 28 SEC v. Chenery Corp., 318 U.S. 80 (1943)........................................................................................................ 7, 33 Sierra Club v. EPA, 167 F.3d 658 (D.C. Cir. 1999) .......................................................................................... 45 Small v. United States, 158 F.3d 576 (Fed. Cir. 1998)............................................................................................. 5 Star Fruits S.N.C. v. United States, 393 F.3d 1277 (Fed. Cir. 2005)......................................................................................... 24 Stevens v. Tamai, 366 F.3d 1325 (Fed. Cir. 2004)................................................................................... 10, 11 Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 277 F.3d 1361 (Fed. Cir. 2002) ("Symbol II")............................................................ 14, 15 Symbol Techs., Inc. v. Lemelson Med., Educ., & Research Found., 422 F.3d 1378 (Fed. Cir. 2005) ("Symbol IV").......................................................... passim Tecumseh Prods. Co. v. Briggs & Stratton Corp., 295 F. Supp. 2d 902 (E.D. Wis. 2003).............................................................................. 22 United States v. Chrysler, 158 F.3d 1350 (D.C. Cir. 1998) ........................................................................................ 25 United States v. Hoechst Celanese Corp., 128 F.3d 216 (4th Cir. 1997) ............................................................................................ 25

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United States v. Trident Seafoods, 60 F.3d 556 (9th Cir. 1995) .............................................................................................. 26 Williams v. Taylor, 529 U.S. 362 (2000)............................................................................................................ 5 Winchester v. Comm'r, 27 B.T.A. 798 (1933)........................................................................................................ 36 Statutes 35 U.S.C § 2(b)(2)(C) ..................................................................................................................... 4 35 U.S.C § 2(b)(2)(D)..................................................................................................................... 4 35 U.S.C § 261........................................................................................................................ 31, 34 35 U.S.C. § 101............................................................................................................................. 21 35 U.S.C. § 102............................................................................................................................. 23 35 U.S.C. § 103............................................................................................................................. 23 35 U.S.C. § 112, ¶ 2...................................................................................................................... 20 35 U.S.C. § 131............................................................................................................................. 23 35 U.S.C. § 154(d) ............................................................................................................ 31, 33, 35 35 U.S.C. § 171............................................................................................................................. 21 35 U.S.C. § 2(b)(2)(A).................................................................................................................... 4 5 U.S.C. § 553(b) .......................................................................................................................... 11 5 U.S.C. § 706(2) .......................................................................................................................... 37 Regulations 37 C.F.R. § 1.105 .......................................................................................................................... 24 37 C.F.R. § 1.56 ............................................................................................................................ 24 37 C.F.R. § 10.18 .......................................................................................................................... 38 Changes to Application Examination and Provisional Application Practice, 65 Fed. Reg. 14,865, 14,868 (Mar. 20, 2000) (interim rule) ............................................ 19

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Changes to Implement the Patent Business Goals, 63 Fed. Reg. 53,498, 53,506-08 (Oct. 5, 1998) ................................................................ 40 Changes to Implement the Patent Business Goals, 64 Fed. Reg. 53,772, 53,774-75 (Oct. 4, 1999) ................................................................ 40 Request for Continued Examination Practice and Changes to Provisional Application Practice, 65 Fed. Reg. 50,092, 50,095 (Aug. 16, 2000)................................................................... 19 Constitutional Provisions American Inventors Protection Act of 1999, Pub. L. No. 106-113, 113 Stat. 1501 (1999)........................................................................................................ 18 Other Authorities 8 Donald S. Chisum, Chisum on Patents § 23.01 (2007).................................................................................... 21 Manual of Patent Examining Procedure § 2190 (8th ed. 2007).................................................... 15

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TABLE OF ABBREVIATIONS FOR CITATIONS TO COURT FILINGS Abbreviation GSK SJ Br. Knowles Decl. Document Memorandum in Support of GlaxoSmithKline's Motion for Summary Judgment, Docket No. 142 in 1:07cv846 Declaration of Sherry M. Knowles, Exhibit 4 (Docket No. 14211) to the Memorandum in Support of GlaxoSmithKline's Motion for Summary Judgment, Docket No. 142 in 1:07cv846 Declaration of Harry F. Manbeck, Jr., Exhibit 5 (Docket No. 14212) to the Memorandum in Support of GlaxoSmithKline's Motion for Summary Judgment, Docket No. 142 in 1:07cv846 Exhibits to the Memorandum in Support of GlaxoSmithKline's Motion for Summary Judgment, Docket No. 142 in 1:07cv846 Memorandum in Support of Defendants' Motion for Summary Judgment, Docket No. 141 in 1:07cv846 Brief of Amicus Curiae American Intellectual Property Law Association, Docket No. 185 in 1:07cv846 Brief of Amicus Curiae Intellectual Property, Administrative Law and Public Health Professors in Support of Defendants' Anticipated Motions for Summary Judgment, Docket No. 232 in 1:07cv846 Brief of Amicus Curiae Micron Technology, Inc., in Support of Defendants' Anticipated Motion for Summary Judgment, Docket No. 229 in 1:07cv846 Brief of Amicus Curiae Public Patent Foundation, et al., in Support of Defendants' Anticipated Motions for Summary Judgment, Docket No. 228 in 1:07cv846 Verified Amended Complaint, Docket No. 5 in 1:07cv1008 PTO Opposition to Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction, Docket No. 46 in 1:07cv1008 Brief of Amicus Curiae American Intellectual Property Law Association in Support of "GSK" Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction, Docket No. 30-1 in 1:07cv1008 October 31, 2007 Hearing Transcript, Docket No. 69 in 1:07cv1008

Manbeck Decl.

Ex. ___ (1-26) PTO SJ Br. AIPLA SJ Br. L. Profs. Br.

Micron Br.

PPF Br.

Am. Compl. PTO TRO Opp. Br.

AIPLA TRO Br.

TRO Hr'g Tr.

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I.

INTRODUCTION. In its October 31, 2007 Memorandum Opinion, this Court correctly enjoined

implementation of the ultra vires Final Rules as likely contrary to law. GlaxoSmithKline v. Dudas, 511 F. Supp. 2d 652 (E.D. Va. 2007). In its first opportunity to address the controlling issues of this case since the injunction, the PTO offers newly contrived and inconsistent arguments that bolster GSK's positions and this Court's preliminary ruling. In its brief, the PTO primarily argues that it has the authority to promulgate the Final Rules and, therefore, is entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). But what the PTO ignores is that where Congress withholds rulemaking authority from an agency, the Supreme Court has made clear that the agency is entitled to no deference. Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990).

Inexplicably, despite Adams Fruit's prominence in this case, neither the PTO in its 70-page moving brief, nor the amici who support the PTO acknowledges Adams Fruit even once. Unable to take refuge in Chevron or surmount Adams Fruit, the PTO nevertheless forges ahead with its substantive power grab. The PTO now nakedly asserts that it possesses

substantive rulemaking authority. Until now, the PTO had not claimed such authority--not when it promulgated the Final Rules; not when it opposed GSK's request for preliminary relief; and not when it argued at the preliminary injunction hearing. But, in addition to representing a post hoc rationalization of counsel that cannot stand because the agency did not adopt it in the rulemaking documents, the PTO's new-found argument falters under Merck & Co. v. Kessler, 80 F.3d 1543, 1549-50 (Fed. Cir. 1996), in which the Federal Circuit made clear, in the wake of Adams Fruit, that the PTO lacks any such substantive rulemaking authority. Undaunted, the PTO grasps at another new and indefensible position that cannot be squared with Merck--that the distinction between substantive and procedural rules is a "false dichotomy." 1

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Despite its protestations to the contrary, the PTO cannot escape the fact that the Final Rules directly conflict with governing statutes and affect substantive rights as they have been interpreted by controlling judicial decisions for decades. See, e.g., In re Henriksen, 399 F.2d 253, 254 (C.C.P.A. 1968) (holding that there is no statutory basis for imposing an "arbitrary limit" on the number of allowable continuing applications); In re Wakefield, 422 F.2d 897, 900 (C.C.P.A. 1970) ("[T]here is no statutory authority for rejecting claims as being `unnecessary.' [Rather], an applicant should be allowed to determine the necessary number and scope of his claims, provided he pays the required fees and otherwise complies with the statute."). Final Rule 78 limits applicants to two continuing applications in direct contradiction to section 120's lack of any such limit. Final Rule 114 limits applicants to one request for continued examination ("RCE") per application family although section 132 contains no such limit. Final Rule 75 limits the number of claims an applicant may seek although section 112 contains no such limit. Because these Final Rules expressly limit applicants' substantive rights under the Patent Act, they are substantive rules, not procedural ones. As it has for some time now, the PTO wrongly asserts that the limits: (i) are "procedural"; (ii) are not limits at all; or (iii) that the doctrine of prosecution laches allows the PTO to impose limits. Yet there can be no doubt that these Final Rules impose substantive restrictions on applicants. In fact, the PTO has even announced that these rules will limit continuing applications, RCEs, and claims. And this comes as little surprise, given that the very purpose of these rules is to reduce the backlog looming at the PTO. Moreover, the PTO attempts to use the doctrine of prosecution laches to justify its limits, but in doing so, ignores the Federal Circuit's most recent case on the doctrine--Symbol IV--upon which this Court relied in preliminarily enjoining the Final Rules, and which warns that the doctrine is to be invoked

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"sparingly lest statutory provisions be unjustifiably vitiated" and "applied only in egregious cases." The PTO exacerbates its unlawful rulemaking by applying these rules retroactively, although, as it now concedes, Congress has granted it no such authority. While the PTO asserts that applying the Final Rules to its "backlog" will improve "administrative efficiency," the truth is that the Final Rules will have little, if any, impact on the PTO's backlog. Instead, the only significant impact that these Final Rules will have is to harm GSK and other innovators to the detriment of the public health and the public's interest in promoting innovation. As GSK has described, and the PTO ignored, the Final Rules will destroy the quid pro quo bargain inherent in already filed GSK patent applications, thereby putting at risk hundreds of millions of dollars of capital, eviscerating business certainty, and destroying proprietary rights in patent applications. The PTO suggests that patent applicants lack any sort of property interest in their patent applications, but, in so doing, ignores the Takings Clause of the Constitution; controlling Supreme Court precedent, Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984); and the Patent Act itself (which, not surprisingly, Congress designed to protect property rights, not run roughshod over them). Further, the PTO essentially concedes that the preexamination search of its new examination support document ("ESD") requirement is hopelessly vague. Not once has the PTO identified what it would consider to be an adequate search. Rather, the PTO argues that the search requirement "cannot . . . be read in isolation." But none of the eight extraneous

"guidance" documents it invokes in an attempt to cure facial vagueness actually do so. They fall woefully short, leaving applicants to guess how to comply with the ESD requirement.

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For at least these reasons, and as set forth in more detail below, GSK respectfully urges the Court to enforce congressional and constitutional limits on the PTO's sphere of authority, and vacate the Final Rules.1 II. THE PTO'S MOTION MUST BE DENIED BECAUSE GSK IS ENTITLED TO JUDGMENT AS A MATTER OF LAW ON ALL CAUSES OF ACTION. A. The PTO Lacks Substantive Rulemaking Authority, Cannot Promulgate Rules Inconsistent With Established Law, And Is Entitled To No Deference When It Attempts To Do So. See Merck, 80 F.3d at 1549-50.

The PTO lacks substantive rulemaking authority.

Despite this, the PTO asserts that the Final Rules fall within its power to "`establish regulations, not inconsistent with law' to `govern the conduct of proceedings in the Office,'" to "`facilitate and expedite the processing of patent applications,'" and to "`govern the . . . conduct of . . . parties before the Office.'" (PTO SJ Br. 14-15 (citing 35 U.S.C. §§ 2(b)(2)(A), (C), (D), respectively).) This argument fails on several fronts. First, the Final Rules are substantive because they affect applicants' rights and obligations. See Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (Substantive rules are those that "affect[] individual rights and obligations."); Animal Legal Def. Fund v. Quigg, 932 F.2d 920, 927 (Fed. Cir. 1991) (stating that substantive rules are those that "effect[] a change in existing law or policy which affect[] individual rights and obligations") (internal quotations omitted). The Final Rules limit continuing applications, RCEs, and claims. See infra §§ II.B., II.D.; (see also Ex. 18 at A00432 ("Why Limit Continuations?"), A00434 ("Why Limit GSK disputes the PTO's "Statement of Material Undisputed Facts." (See PTO SJ Br. 7-13.) Many of the purported facts are merely unsupported assertions. (See, e.g., id. at 7 (stating without factual support that a "substantial portion of th[e] backlog is attributable" to "negligent" or "deliberate" practices that "unnecessarily prolong prosecution through use of repetitive and vexatious continuing applications").) GSK shows herein and in its opening summary judgment brief why those assertions are incorrect, and, ultimately, why the Final Rules are unlawful. (See, e.g., GSK SJ Br. 7-12.)
1

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Claims?").) Those limits affect GSK's substantive rights, including rights under sections 102, 103, 112, 120, 132, and 154(d), among others. For example, the limit on continuing applications denies GSK its statutory right to the filing date of a prior application, which will affect its rights under sections 102 and 103 and result in the denial of an otherwise meritorious patent. (See Manbeck Decl. ¶¶ 14-19.) The limit on RCEs denies GSK its statutory rights under section 132 to an unlimited number of RCEs per application "at the request of the applicant." (Id. ¶¶ 27-29, 40.) The limit on claims denies GSK its statutory right under section 112 to use "one or more claims" to define its inventions. (Id. ¶¶ 12, 43-46.) Further, the imposition of the claims limit on pending published applications strips GSK of its provisional rights expressly provided for in section 154(d). Thus, the Final Rules are substantive. As a result, the Final Rules are not entitled to any deference, because Congress carefully confined the PTO's authority under section 2 to procedural matters and did not authorize the PTO to interpret the terms of the Patent Act itself. See Adams Fruit, 494 U.S. at 649. ("A precondition to deference under Chevron is a congressional delegation of administrative authority."); see also Williams v. Taylor, 529 U.S. 362, 387 n.13 (2000) (Chevron deference "depends on delegation."); Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1381 n.6 (Fed. Cir. 2001) (citing Merck for its holding that the PTO lacks substantive rulemaking authority and, thus, cannot claim Chevron deference); Small v. United States, 158 F.3d 576, 581 n.1 (Fed. Cir. 1998) (same); Hodge v. West, 155 F.3d 1356, 1361 (Fed. Cir. 1998) (same). It is not enough that an agency possesses some power to issue regulations over some aspects of a statute. As the Supreme Court explained in Adams Fruit: Congress clearly envisioned, indeed expressly mandated, a role for the Department of Labor in administering the [Agricultural Worker Protection Act ("AWPA")] statute by requiring the Secretary to promulgate standards implementing AWPA's motor vehicle provisions. This delegation, however, does 5

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not empower the Secretary to regulate the scope of the judicial power vested by the statute. Although agency determinations within the scope of delegated authority are entitled to deference, it is fundamental "that an agency may not bootstrap itself into an area in which it has no jurisdiction." 494 U.S. at 650 (first emphasis in original; all other emphasis added) (citation omitted). In such circumstances, Chevron deference is inapplicable. See A.T. Massey Coal Co. v. Holland, 472 F.3d 148, 167 (4th Cir. 2006) (according no deference to the Social Security Administration when Congress did not delegate the authority to interpret the provisions of the Coal Act); see also Atchison, Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437, 441 (7th Cir. 1994) (en banc) (no delegation to Federal Railway Administration over hours of service) (relied upon prominently by the Federal Circuit in Merck), aff'd sub nom. Bhd. of Locomotive Eng'rs v. Atchison, Topeka & Santa Fe R.R. Co., 516 U.S. 152 (1996). Congress did not vest the PTO with substantive rulemaking authority, and, therefore, the Final Rules are not entitled to any deference. Furthermore, the Patent Act and the Federal Circuit's authoritative construction of that Act control the rights attendant to continuing applications, RCEs, and claims. The PTO cannot alter longstanding practice under those provisions without an express delegation from Congress. See Lechmere, Inc. v. NLRB, 502 U.S. 527, 536-37 (1992) (Once courts "have determined a statute's clear meaning, we adhere to that determination under the doctrine of stare decisis, and we judge an agency's later interpretation of the statute against our prior determination of the statute's meaning."); see also ITT Indus., Inc. v. NLRB, 413 F.3d 64, 68 (D.C. Cir. 2005) (stating that the Lechmere principle, where applicable, displaces Chevron deference).2 The PTO asserts that it is entitled to deference under National Cable & Telecommunications Ass'n v. Brand X Internet Services, 545 U.S. 967 (2005) ("Brand X"), alleging that, for Lechmere to apply, the courts must hold that judicial interpretations that precede agency interpretations are the only possible way to interpret the statute at issue and that the Henriksen case "did not hold that Section 120 unambiguously disallows putting conditions on continuation filings." (PTO SJ
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Second, the PTO's attempts to enclose its Final Rules within the framework of Chevron are unavailing. (See PTO SJ Br. 13-20.) As part of this effort, the PTO completely ignores Adams Fruit in its 70-page opening brief, despite GSK's reliance on Adams Fruit since day one and this Court's reliance on Adams Fruit in preliminarily enjoining the Final Rules' implementation, see GlaxoSmithKline, 511 F. Supp. 2d at 663-64.3 Similarly, the amicus law professors who support the PTO fail to address Adams Fruit; instead, they assert that "the first logical question in evaluating the regulations is whether Chevron is applicable." (See L. Profs. Br. 3.)4 Under Adams Fruit, however, the first question is whether Congress has delegated relevant rulemaking power to the PTO. The answer to that question here is a resounding "NO."

Br. 25 (citing Brand X, 545 U.S. at 982).) Brand X, however, is inapplicable for several reasons. First, Brand X applies only if an agency is entitled to Chevron deference, and here the PTO is not. 545 U.S. at 982. Second, courts have held that the language of section 120 is unambiguous. In re Henriksen, 399 F.2d 253, 254 (C.C.P.A. 1968) (holding that there is no statutory basis for imposing an "arbitrary limit" on the number of allowable continuing applications); see also In re Hogan, 559 F.2d 595, 604 (C.C.P.A. 1977) (stating that the language of section 120 is "clear and unambiguous"). Lastly, controlling Federal Circuit authority unambiguously directs that the doctrine of prosecution laches should only be "used sparingly lest statutory provisions be unjustifiably vitiated . . . [and] should be applied only in egregious cases of misuse of the statutory patent system." Symbol Techs., Inc. v. Lemelson Med., Educ., & Research Found., 422 F.3d 1378, 1385 (Fed. Cir. 2005) ("Symbol IV"). The PTO's failure to address Adams Fruit is consistent with its failure to address the case during its rulemaking process, which is a separate ground for vacating the PTO's actions as arbitrary and capricious: "[I]f [agency] action is based upon a determination of law as to which the reviewing authority of the courts does come into play, an order may not stand if the agency has misconceived the law." Prill v. NLRB, 755 F.2d 941, 947 (D.C. Cir. 1985) (quoting SEC v. Chenery Corp., 318 U.S. 80, 94 (1943)).
3 4

The PTO and the amicus law professors who support it also assert that the Supreme Court's decision in Dickinson v. Zurko, 527 U.S. 150 (1999), worked a sea change in judicial review of the PTO by declaring that the PTO is subject to ordinary administrative law principles. (PTO SJ Br. 16 n.8; L. Profs. Br. 1.) However, Dickinson merely held that the arbitrary and capricious standard of review, rather than a clearly erroneous standard, applied to the PTO's fact-finding in its adjudications. 527 U.S. at 152. Critically, though, the Final Rules involve PTO rulemaking rather than adjudication. Thus, Dickinson is irrelevant to whether the PTO possesses the authority to issue the Final Rules. 7

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The PTO also asserts it is entitled to Chevron deference because section 2(b)(2) grants it rulemaking authority. (See PTO SJ Br. 14.) But that misses the point. The issue is not whether the PTO has some rulemaking authority, but whether it possesses the relevant substantive rulemaking authority to pass these rules. See Merck, 80 F.3d at 1549-50. Merck unambiguously states that the PTO lacks substantive rulemaking power, contrary to the PTO's attempts to distinguish the case (see PTO SJ Br. 17-20).5 In fact, Merck is in line with Adams Fruit, as the Merck court stated that "only statutory interpretations by agencies WITH RULEMAKING POWERS deserve substantial deference." 80 F.3d at 1549 (emphasis in original) (quoting Atchison, Topeka, 44 F.3d at 441).6 Thus, the PTO's bid for Chevron deference should be denied. The PTO's new claim that Congress delegated substantive rulemaking authority to it clearly goes too far. (PTO SJ Br. 20, 49 n.30.) Not to be mistaken, the PTO reiterates its ambitious new claim to power, stating specifically that "the USPTO disputes . . . the proposition that the USPTO lacks substantive rulemaking authority." (Id. 49 n.30.) For over a decade, it has been abundantly clear that the PTO lacks such substantive rulemaking authority. Merck, 80 F.3d at 1549-50; Brand v. Miller, 487 F.3d 862, 869 n.3 (Fed. Cir.) ("[W]e have held in any event that the Board does not earn Chevron deference on questions of substantive patent law."), cert. The fact that Congress has recently considered but expressly declined to grant the PTO substantive rulemaking authority further evidences the fact that the PTO currently lacks such authority. (See GSK SJ Br. 18; Manbeck Decl. ¶ 9.)
5

In Atchison, Topeka, the Seventh Circuit made clear that it was applying Adams Fruit in rejecting an assertion of Chevron deference. 44 F.3d at 445 (Easterbrook & Manion, JJ., Posner C.J., concurring) ("The Federal Railway Administration has not been delegated either rulemaking or adjudicative power over the subject of hours of service. It therefore cannot demand obedience to its law-making choices after the fashion of Chevron . . . See Adams Fruit . . . ."). In affirming Atchison, Topeka, the Supreme Court did not address the question of deference at all, because the en banc ruling of the Seventh Circuit was so clearly correct on that issue. See Bhd. of Locomotive Eng'rs, 516 U.S. 152.
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denied, 128 S. Ct. 650 (2007); Eli Lilly & Co. v. Bd. of Regents of Univ. of Wash., 334 F.3d 1264, 1269 n.1 (Fed. Cir. 2003). As the Federal Circuit recently explained, "`an agency literally has no power to act . . . unless and until Congress confers power upon it.'" Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024, 1033 (Fed. Cir. 2007) (quoting La. Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 374 (1986)). The PTO also errs by overlooking Adams Fruit and invoking so-called Skidmore deference as an alternative argument. (PTO SJ Br. 20 (citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).) Skidmore deference is irrelevant because the Supreme Court has held that no deference is due where the agency acts outside its delegated authority and instead has conferred interpretive authority on the judiciary. See Brown & Williamson Tobacco Corp. v. FDA, 153 F.3d 155, 161-62 (4th Cir. 1998) (discussing Chevron and Adams Fruit), aff'd, FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000); see also Am. Bar Ass'n v. FTC, 430 F.3d 457, 468-70 (D.C. Cir. 2005); Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1265-66 (10th Cir. 2001) ("Because the Secretary lacked authority to interpret the term `reservation,' . . . we owe no deference to his interpretation . . . . Instead, we proceed to decide for ourselves the meaning of the term `reservation,' as used in IGRA.") (citations omitted); New York State Bar Ass'n v. FTC, 276 F. Supp. 2d 110, 140 (D.D.C. 2003) ("[T]he FTC's interpretation falls beyond the pale of both Chevron and Skidmore and thus is entitled to no deference."). Thus, the PTO's alternative bid for Skidmore deference should also be rejected. Third, the cases upon which the PTO relies do not support its substantive power grab. (See PTO SJ Br. 15-16.) Instead, the cases discuss procedural rules. See Lacavera v. Dudas, 441 F.3d 1380, 1382 (Fed. Cir. 2006) (concerning the PTO's refusal to conduct the procedure of registering a foreign national to fully practice before it), cert. denied, 127 S. Ct. 1246 (2007);

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Stevens v. Tamai, 366 F.3d 1325, 1332-33 (Fed. Cir. 2004) (relating to the PTO's procedural requirement that a party submit a translation of a foreign language application during an interference proceeding).7 The PTO then asserts that the Final Rules are procedural and not substantive because they do not affect GSK's rights to receive a patent if GSK's applications comply with 35 U.S.C. §§ 101, 102, 103, and 112. (PTO SJ Br. 18-19.) This is simply wrong. As explained above, the Final Rules are substantive because they affect applicants' rights and obligations. See Animal Legal Def. Fund, 932 F.2d at 927. The PTO further asserts that it can issue procedural regulations, even if such regulations may have substantive effects. (PTO SJ Br. 19-20.) This directly contradicts the PTO's prior representations to this Court. (See TRO Hr'g Tr. at 42-43 ("These are procedural rules . . . [that] do not affect the substantive eligibility criteria for getting a patent. They don't affect the criteria of novelty. . . . That's what's substantive in getting a patent. . . . They're procedural for that reason as well.") (emphasis added).) In reaching for that authority, the PTO relies on two inapposite cases. In re Van Ornum stands for the proposition that the PTO can issue procedural regulations that comport with statutory and case law. 686 F.2d 937, 945 (C.C.P.A. 1982). Here,

The PTO also cites to Morganroth v. Quigg, 885 F.2d 843 (Fed. Cir. 1989), as supporting its position. (PTO SJ Br. 16.) But, Morganroth involved the Commissioner's refusal to revive a patent application on the ground that he lacked the authority to do so where an application was abandoned by failing to file an appeal from an adverse District Court ruling. 885 F.2d at 847. Morganroth is a case where the agency disclaimed authority under the relevant statute as compared to here where the PTO is asserting expanded authority. The PTO's reliance on Centigram Commc'ns Corp. v. Lehman, 862 F. Supp. 113 (E.D. Va. 1994) is similarly unavailing. (PTO SJ Br. 16.) Centigram involved a procedural rule relating to reviving patents abandoned due to unintentional failure to pay a maintenance fee, and further Congress "literal[ly] . . . grant[ed] the Commissioner the authority to reinstate any patent meeting those specific requirements." 862 F. Supp. at 117 (emphasis in original). In other words, in Centigram, "[t]he statute's plain language [left] no doubt that Congress squarely addressed this question." Id.
7

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the Final Rules do not comport with statutory or case law. The PTO cites Stevens v. Tamai for the proposition that the PTO may "establish burdens of proof" (PTO SJ Br. 19-20), but Stevens merely condoned the PTO's rule requiring the submission of a translation of a foreign language application when an applicant relies on the foreign language application to establish priority in an interference, 366 F.3d at 1332. Fourth, in a last-ditch effort to rescue its rules, the PTO argues that the distinction between "substantive" and "procedural" rules is an irrelevant "false dichotomy." (PTO SJ Br. 17.) Preliminarily, in the two years since it first published the proposed rules, the PTO has never asserted this "false dichotomy" argument. To the contrary, the PTO has repeatedly distinguished between "procedural" and "substantive" rulemaking and characterized the Final Rules as procedural. (See Ex. 1 at 46,830 ("The changes . . do not change the substantive criteria of patentability . . . [and t]herefore, these rule changes involve interpretive rules, or rules of agency practice and procedure.") (citations omitted); PTO TRO Opp. Br. 21-23.) More importantly, the Federal Circuit clearly sees a difference between "procedural" and "substantive" rules, as it has unambiguously stated that the PTO lacks substantive rulemaking authority. See, e.g., Merck, 80 F.3d at 1549-50; Brand, 487 F.3d at 869 n.3. Indeed, the amicus law professors who support the PTO do not agree that such a "false dichotomy" exists: they begin their analysis by conceding that the PTO's only rulemaking power is to "make regulations governing its internal proceedings." (L. Profs. Br. 4 (emphasis added).) Moreover, the APA itself draws a distinction between "procedural" and "substantive" rules. 5 U.S.C. § 553(b). In sum, the Final Rules are "inconsistent with law" and, therefore, exceed the PTO's authority. See infra §§ II.B., II.C., and II.D.; (GSK SJ Br. 20-28).

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B.

The Arbitrary And Mechanical Limit On Continuing Applications In Final Rule 78 Is Contrary To Established Patent Law. 1. Final Rule 78 Is Inconsistent With The Plain Language Of Section 120.

Rule 78's arbitrary limit on continuing applications contradicts the plain language of section 120, which expressly states that a continuation application "shall" be given the benefit of the same filing date as the application to which it references, so long as the other requirements of Title 35 are satisfied. Although the PTO does not dispute this language (see PTO SJ Br. 21), it nevertheless asserts that it has the authority to impose "reasonable conditions" on continuation applications because section 120 allegedly "says nothing" on that issue, (id. 21-22). Section 120, however, is not silent and could not be more clear: if an application meets the formal requirements of section 120, then the PTO shall (i.e., must) accord the application the benefit of the earlier filing date. The PTO is not at liberty to add to the requirements Congress created in section 120. See Ry. Labor Execs. Ass'n v. Nat'l Mediation Bd., 29 F.3d 655, 671 (D.C. Cir. 1994) (en banc) (text, structure, case law and 60-year history of Board recognizing limited authority justified invoking expressio unius canon). contradicts the express language of section 120. Contrary to the PTO's assertion, Rule 78 is not a "reasonable condition," but a hard limit. The PTO has made clear that it will deny a petition for a third continuing application in almost all circumstances. (See Ex. 1 at 46,769-77.)8 Neither the PTO nor the three amici who support it identified a single set of circumstances under which the PTO has indicated it will grant a petition Rule 78's mechanical limit therefore

Moreover, the PTO's own ethical rules may bar GSK from even submitting a petition in the first instance, further evidencing that Final Rule 78 imposes a hard limit. (See GSK SJ Br. 22; Manbeck Decl. ¶¶ 40-42.)
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to exceed Rule 78's limit of two continuing applications.9 Conversely, the PTO has gone so far as to indicate that it will refuse to accept justifications for filing additional continuations that the Federal Circuit expressly validated in Symbol IV. (See GSK SJ Br. 10, 21; Manbeck Decl. ¶¶ 3235, 38.) Further highlighting Rule 78's hard limit is the fact that the PTO will bar an applicant from obtaining additional continuing applications to submit claims to cover a competitor's product. (Ex. 1 at 46,775.) The three amici who support the PTO also complain about

applicants who obtain additional continuing applications to submit claims to cover competitors' products. (Micron Br. 6; PPF Br. 10; L. Profs. Br. 14-15.) However, the Federal Circuit has unambiguously approved of applicants filing continuing applications for this purpose. It should be made clear at the outset of the present discussion that there is nothing improper, illegal or inequitable in filing a patent application for the purpose of obtaining a right to exclude a known competitor's product from the market; nor is it in any manner improper to amend or insert claims intended to cover a competitor's product the applicant's attorney has learned about during the prosecution of a patent application. Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 874 (Fed. Cir. 1988). Thus, Rule 78 substantively changes the law. The PTO also manufactures a textual conflict between GSK's reading of section 120 and sections 112, 121, and 251 of the Patent Act. (See PTO SJ Br. 22-23.) Never mind that the PTO has applied these sections without any conflict for decades; there simply is no conflict, and the PTO does not cite a single case that supports its position. Instead, the PTO warps the Federal Circuit's pronouncement in Johnson & Johnston Assocs., Inc. v. R.E. Serv. Co., 285 F.3d 1046

9

For that same reason, the PTO's newly contrived argument that Final Rule 183 provides an "extraordinary circumstances" exception to Rule 78's hard limit is also without merit. (See PTO SJ Br. 25 n.12.) The PTO fails to identify a single set of circumstances that would satisfy that standard, further confirming that Final Rule 78 is a hard limit. 13

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(Fed. Cir. 2002), that subject matter "disclosed but . . . not claim[ed is] dedicated to the public." (PTO SJ Br. 22.) Johnson & Johnston expressly endorses filing continuing applications to claim disclosed but unclaimed subject matter and rejects the notion that there is a textual conflict: A patentee who inadvertently fails to claim disclosed subject matter, however, is not left without remedy. Within two years from the grant of the original patent, a patentee may file a reissue application and attempt to enlarge the scope of the original claims to include the disclosed but previously unclaimed subject matter. 35 U.S.C. § 251 (2000). In addition, a patentee can file a separate application claiming the disclosed subject matter under 35 U.S.C. § 120 (2000) (allowing filing as a continuation application if filed before all applications in the chain issue). Notably, Johnston took advantage of the latter of the two options by filing two continuation applications that literally claim the relevant subject matter. 285 F.3d at 1055 (The two "continuation applications" that the Federal Circuit specifically endorsed are the second and third out of six that the applicants filed.); see also Hakim v. Cannon Avent Group, PLC, 479 F.3d 1313, 1317 (Fed. Cir. 2007) ("It is recognized that an applicant can broaden as well as restrict his claims during the procedures of patent examination, and that continuing applications may present broader claims than were allowed in the parent.") (citing Symbol IV), cert. denied, 128 S. Ct. 391 (2007). Thus, no conflict exists. The PTO also mistakenly argues that the history of section 120 supports the purported textual conflict. (PTO SJ Br. 23-24 (citing Woodbridge v. United States, 263 U.S. 50 (1923) and Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924)).) First, as explained, there is no conflict. Second, the two cases the PTO cites merely concern prosecution laches. See Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 277 F.3d 1361, 1364 (Fed. Cir. 2002) ("Symbol II") (identifying Woodbridge and Webster Electric as prosecution laches cases); see also Symbol IV, 422 F.3d at 1385 (same); In re Bogese II, 303 F.3d 1362, 1367 (2002) (same). Thus, the history of section 120 confirms that, for over a century, applicants have been permitted to file additional continuing applications so long as they did not run afoul of the doctrine of prosecution laches. 14

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2.

The Doctrine Of Prosecution Laches Does Not Save Rule 78.

The PTO asserts that the equitable doctrine of prosecution laches allows it to impose "reasonable conditions" on the number of continuing applications that any applicant may file. (See PTO SJ Br. 23-25.) Inexplicably, however, neither the PTO nor the amici who support it address Symbol IV in their briefs, the key case on the issue.10 Under Symbol IV, the prosecution laches doctrine applies only in egregious cases and only on a case-by-case basis. See Symbol IV, 422 F.3d at 1385; see also Bogese III, 303 F.3d at 1368 n.6, 1369; Symbol II, 277 F.3d at 1364. As the Federal Circuit court expressly warned: There are legitimate grounds for refiling a patent application which should not normally be grounds for a holding of laches, and the doctrine should be used sparingly lest statutory provisions be unjustifiably vitiated. The doctrine should be applied only in egregious cases of misuse of the statutory patent system.

In its manual governing internal procedures, the PTO acknowledged that the prosecution laches doctrine was limited to egregious circumstances, citing Symbol IV.
10

The Federal Circuit affirmed a rejection of claims in a patent application on the ground that applicant had forfeited his right to a patent under the doctrine of prosecution history laches for unreasonable and undue delay in prosecution. In re Bogese, 303 F.3d 1362, 1369, 64 USPQ2d 1448, 1453 (Fed. Cir. 2002) (Applicant "filed twelve continuation applications over an eight-year period and did not substantively advance prosecution when required and given an opportunity to do so by the PTO."). >While there are no firm guidelines for determining when laches is triggered, it applies only in egregious cases of unreasonable and unexplained delay in prosecution. For example, where there are "multiple examples of repetitive filings that demonstrate a pattern of unjustified delayed prosecution," laches may be triggered. Symbol Tech. Inc. v. Lemelson Med., Educ., & Research Found., 422 F.3d 1378, 1385, 76 USPQ2d 1354, 1360 (Fed. Cir. 2005) (Court discussed difference between legitimate reasons for refiling patent applications and refilings for the business purpose of delaying the issuance of previously allowed claims.). PTO, Manual of Patent Examining Procedure ("MPEP") § 2190 (8th ed. 2007) (emphasis added). The PTO goes so far as to require its examiners to "obtain approval from [their supervisors] before making a rejection on the grounds of prosecution history laches." Id. The foregoing also demonstrates that Bogese II is a prosecution laches case properly read in the context of Symbol IV. 15

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Symbol IV, 422 F.3d at 1385 (emphasis added).

This is consistent with Bogese II's

pronouncement that the PTO lacks the ability to impose "a mechanical rule based on a misconstruction of the statutory requirements" and that each case should be decided on its facts. 303 F.3d at 1368 n.6, 1369. The Federal Circuit's Symbol II, Bogese II, and Symbol IV trilogy establishes that the PTO may reject applications based upon prosecution laches only in extreme situations on a case-by-case basis, not in Rule 78's mechanical and arbitrary manner.11 See Symbol IV, 422 F.3d at 1385-86 (affirming the unenforceability of fourteen patents under the prosecution laches doctrine when "an 18- to 39-year time period had elapsed between the filing and issuance of the patents in suit"); Bogese II, 303 F.3d at 1369 (affirming a PTO rejection where "Bogese filed twelve continuation applications over an eight-year period and did not substantively advance prosecution of his application when required and given an opportunity to do so by the PTO"); see also Novozymes A/S v. Genencor Int'l, Inc., 446 F. Supp. 2d 297, 333 (D. Del. 2006) (citing Symbol IV and finding no prosecution laches where the patent issued from a divisional application of a third continuing application and more than ten years after its effective filing da