Tafas v. Dudas et al

Filing 261

RESPONSE in Support re 126 MOTION for Summary Judgment Against the "GlaxoSmithKline" Plaintiffs, 125 MOTION for Summary Judgment Against Plaintiff Triantafyllos Tafas filed by Jon Dudas, The United States Patent and Trademark Office. (Attachments: # 1 Exhibit 1# 2 Exhibit 2)(Wetzler, Lauren)

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

Civil Action No. 1:07cv846(L) (JCC/TRJ)

CONSOLIDATED WITH SMITHKLINE BEECHAM CORPORATION, et al., Plaintiffs, v. JON W. DUDAS, et al., Defendants. ) ) ) ) ) ) ) ) ) ) )

Civil Action No. 1:07cv1008 (JCC/TRJ)

DEFENDANTS' REPLY MEMORANDUM IN SUPPORT OF THEIR MOTIONS FOR SUMMARY JUDGMENT Of Counsel: JAMES A. TOUPIN General Counsel STEPHEN WALSH Acting Deputy General Counsel and Solicitor WILLIAM COVEY Deputy General Counsel WILLIAM G. JENKS JANET A. GONGOLA NATHAN KELLEY WILLIAM LAMARCA Associate Solicitors JENNIFER M. MCDOWELL Associate Counsel United States Patent and Trademark Office CHUCK ROSENBERG UNITED STATES ATTORNEY LAUREN A. WETZLER RALPH ANDREW PRICE JR. R. JOSEPH SHER Assistant United States Attorneys Attorneys for All Defendants Justin W. Williams U.S. Attorney's Building 2100 Jamieson Avenue Alexandria, Virginia 22314 Tel: [phone] Fax: [phone] [e-mail]

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii TABLE OF ABBREVIATIONS FOR CITATIONS TO COURT FILINGS. . . . . . . . . . . . . . . xiii INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. TH E FINAL RULES ARE CONSISTENT WITH THE PATENT ACT. . . . . . . . . . . . . . . . . 2 A. The Final Rules Were Promulgated Pursuant to Expressly Delegated Rulemaking Authority and Are Thus Eligible for Chevron Deference. . . . . . . . . . . . . . . . . . . . . . . . . . 2 Final Rule 78 Places Reasonable Conditions on the Filing of Continuing Applications, Consistent with Section 120 of the Patent Act.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Final Rule 114 Comports With Section 132. . . . . . . . . . . . . . . . . . . . . . . 12 Final Rules 75 and 265 Are Consistent With Section 112.. . . . . . . . . . . . 14 Tafas's Ancillary Patent Act Claims Lack Merit. . . . . . . . . . . . . . . . . . . . 16

B.

C. D. E. II.

TH E FINAL RULES ARE NOT ARBITRARY OR CAPRICIOUS. . . . . . . . . . . . . . . . . . . 20 A. B. GSK's "Arbitrary and Capricious" Claims Fail.. . . . . . . . . . . . . . . . . . . . 20 Tafas's "Arbitrary and Capricious" Claims Fail. . . . . . . . . . . . . . . . . . . . 22

III.

TH E FINAL RULES ARE NOT RETROACTIVE IN THEIR CURRENT APPLICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 A. The Procedural Nature of the Rules Is Relevant, Even if Not Dispositive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 The Final Rules Do Not Impair Applicants' Rights. . . . . . . . . . . . . . . . . 28 The Final Rules Do Not Impose New Duties on Completed Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

B. C. IV.

GSK'S "ADMINISTRATIVE-LAW BASED TAKINGS CLAIM" FAILS. . . . . . . . . . . . . 32 A. The USPTO Adequately Addressed Takings Issues. . . . . . . . . . . . . . . . . 32 i

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B.

Any Purported Inadequacy In the USPTO's Explanation Could Not Have Been "Prejudicial Error" Absent Valid Takings Concerns.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 1. Patent Applications Are Not Property Under the Fifth Amendment .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 No Taking Would Occur Under Lucas or Penn Central. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2. V. VI.

TA FA S'S PATENT CLAUSE CLAIMS FAILS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 PLA IN T IFFS' VAGUENESS CHALLENGE FAILS AS A MATTER OF LAW. . . . . . . . . . . 39 A. Plaintiff's Vagueness Challenge to Rule 265 Fails Even Under the Fair Notice Doctrine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Final Rule 265 is Constitutionally Clear. . . . . . . . . . . . . . . . . . . . . . . . . . 40

B. VII. VIII.

TH E FINAL RULES ARE "REASONABLY FORESEEABLE" IN LIGHT OF THE PROPOSED RULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 TH E USPTO COMPLIED WITH THE REGULATORY FLEXIBILITY ACT. . . . . . . . . . 46

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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TABLE OF AUTHORITIES Page CASES Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 15 Agri-Mark, Inc. v. Niro, Inc., 233 F. Supp. 2d 200 (D. Mass. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Alenco Commc'ns Inc. v. FCC, 201 F.3d 608 (5th Cir. 2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47, 49 Am. Bar Ass'n v. FTC, 430 F.3d 457 (D.C. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Am. Hosp. Ass'n v. Bowen, 834 F.2d 1037 (D.C. Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Animal Legal Defense Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Application of Rubinfield, 270 F.2d 391 (C.C.P.A. 1959). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15 Associated Fisheries of Me., Inc. v. Daley, 127 F.3d 104 (1st Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46, 50 Atchison, Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437 (7th Cir. 1994).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 7 Bar MK Ranches v. Yuetter, 994 F.2d 735 (10th Cir. 1993).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Batterton v. Marshall, 648 F.2d 694 (D.C. Cir. 1980). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Bellsouth Telecomms., Inc. v. Southeast Telephone, Inc., 462 F.3d 650 (6th Cir. 2006).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Bergerco Canada v. U.S. Treas. Dep't, 129 F.3d 189 (D.C. Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Brenner v. Ebbert, 398 F.2d 762 (D.C. Cir.), cert. denied, 393 U.S. 926 (1968). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 iii

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Buckley v. Valeo, 424 U.S. 1 (1976).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (1962).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Camp v. Pitts, 411 U.S. 138 (1973).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 23 Carpenter v. Sec'y of Veterans Affairs, 343 F.3d 1347 (Fed. Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Cathedral Candle Co. v. U.S. Intern. Trade Comm'n, 400 F.3d 1352 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Centigram Commc'ns Corp. v. Lehman, 862 F. Supp. 113 (E.D. Va. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Chadmoore Commc'n v. FCC, 113 F.3d 235 (D.C. Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Chevron USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Chrysler Corp. v. Brown, 441 U.S. 281 (1979).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cienega Gardens v. United States, 503 F.3d 1266 (Fed. Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 City of Waukesha v. EPA, 320 F.3d 228 (D.C. Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Combs v. Comm'r of Soc. Sec., 459 F.3d 640 (6th Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Connolly v. Pens. Benefit Guar'y Corp., 475 U.S. 211 (1986).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Ctr. for Biological Diversity v. NHTSA, 508 F.3d 508 (9th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 DeFerranti v. Lyndmark, 30 App. D.C. 417 (1908). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 iv

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Ex Parte Henriksen, 154 U.S.P.Q. 53 (Bd. of Pat. Appeals 1966). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ex Parte Hull, 191 U.S.P.Q. 157 (Pat. & Trademark Office Bd. App. 1975). . . . . . . . . . . . . . . . . . . . . . 10 FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Fernandez-Vargas v. Gonazles, 126 S. Ct. 2422 (2006).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Fleury v. Clayton, 847 F.2d 1229 (7th Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 FMC Corp. v. Hennessy Indus., Inc., 836 F.2d 521 (Fed. Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Frazier v. Roessel Cine Photo Tech., Inc., 417 F.3d 1230 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 41 Gilmour v. Gates, McDonald & Co., 382 F.3d 1312 (11th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Godfrey v. Eames, 68 U.S. 317 (1863).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Grayned v. City of Rockford, 408 U.S. 104 (1972).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 In re Bogese, 303 F.3d 1362 (2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12 In re Daniels, 144 F.3d 1452 (Fed. Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 In re Henriksen, 399 F.2d 253 (C.C.P.A. 1968). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 In re Hogan, 559 F.2d 595 (C.C.P.A. 1977). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 In re Oetiker, 977 F.2d 1443 (Fed. Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 v

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In re Patecell, 19 U.S.P.Q. 2d 139 (Comm'r of Pat. & Trademarks 1991).. . . . . . . . . . . . . . . . . . . . . . . 34 In re Piasecki, 745 F.2d 1468 (Fed. Cir. 1984). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 In re Sang Su Lee, 277 F.3d 1338 (Fed. Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 In re Warner, 379 F.2d 1011 (C.C.P.A. 1967). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 INS v. Orlando Ventura, 537 U.S. 12 (2002).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 INS v. St. Cyr, 533 U.S. 289 (2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 JEM Broadcasting Co. v. FCC, 22 F.3d 320 (D.C. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11 Lacavera v. Dudas, 441 F.3d 1380 (Fed. Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Landgraf v. USI Film Products, 511 U.S. 244 (1994).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 5 Long Island Care at Home, Ltd. v. Coke, -- U.S. --, 127 S. Ct. 2339 (2007).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43, 45 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 35 MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340 (1986).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Marsh v. Nichols, Shepherd & Co., 128 U.S. 605 (1888).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Marten v. Yellow Freight Sys., Inc., 993 F. Supp. 822 (D. Kan. 1998).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 vi

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Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 7, 15 Morall v. DEA, 412 F.3d 165 (D.C. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Morton v. Ruiz, 415 U.S. 199 (1974).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 25, 26 N.Y. State Bar Ass'n v. FTC, 276 F. Supp. 2d 110 (D.D.C. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 5, 11 Nat'l Wildlife Found. v. ICC, 850 F.2d 694 (D.C. Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Norton v. Curtiss, 433 F.2d 779 (C.C.P.A. 1970). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Nyeholt v. Secretary of Veterans Affairs, 298 F.3d 1350 (Fed. Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 40 Ohio v. EPA, 997 F.2d 1520 (D.C. Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Olim v. Wakinekona, 461 U.S. 238 (1983).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Paulik v. Rizkalla, 760 F.2d 1270 (Fed. Cir. 1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372 (Fed. Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 4 Pine Tree Med. Assocs. v. Sec. of Health & Human Servs., 127 F.3d 118 (1st Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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Prometheus Radio Project v. F.C.C., 373 F.3d 372 (3d Cir. 2004).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Railway Labor Executives Assocation v. National Mediation Board, 29 F.3d 655 (D.C. Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. U.S. Dep't of Agric., 415 F.3d 1078 (9th Cir. 2005).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Rep. of Austria v. Altmann, 541 U.S. 677 (2004).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Ricoh Co. Ltd. v. Nashua Corp., 1999 WL 88969 (Fed. Cir. 1999).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250 (10th Cir. 2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Skidmore v. Swift & Co., 323 U.S. 134 (1944).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 South Corp. v. United States, 690 F.2d 1368 (Fed. Cir. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Star Fruits S.N.C. v. United States, 393 F.3d 1277 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Stevens v. Tamai, 366 F.3d 1325 (Fed. Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Symbol Techs., Inc. v. Lemelson Med., Educ., & Res. Found., LP, 422 F.3d 1378 (Fed. Cir. 2005) ("Symbol IV"). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12 Tafas v. Dudas, 511 F. Supp. 2d 652 (E.D. Va. 2007) ("Tafas I"). . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 47 Tafas v. Dudas, -- F. Supp. 2d --, 2008 WL 112043 (E.D. Va. Jan. 9, 2008) ("Tafas II"). . . . . . . . passim U.S. Air Tour Ass'n v. Fed. Aviation Admin., 298 F.3d 997 (D.C. Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 U.S. Cellular Corp. v. FCC, 254 F.3d 78 (D.C. Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46, 49, 50 viii

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United States v. Chrysler, 158 F.3d 1350 (D.C. Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 United States v. S. Ind. Gas & Elec. Co., 245 F. Supp. 2d 994 (S.D. Ind. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 United States v. Kay, -- F.3d -- , 2007 WL 3088140, *19 n.16 (5th Cir. Oct. 24, 2007).. . . . . . . . . . . . . . . . . 41 United States v. Lanier, 520 U.S. 259 (1997).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 United States v. Mead Corp., 533 U.S. 218 (2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim United States v. Mistretta, 488 U.S. 361 (1989).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Vt. Yankee Nuclear Power Corp. v. NRDS, 435 U.S. 519 (1978).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 CONSTITUTION U.S. Const. Am. V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 U.S. Const. art. I, § 8, cl. 8.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 STATUTES 5 U.S.C. § 552. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 5 U.S.C. § 553. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 U.S.C. § 553(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 43 5 U.S.C. § 553(b)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5 U.S.C. §§ 601-612. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 5 U.S.C. § 706. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 33, 37 5 U.S.C. § 706(2)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 21, 28 7 U.S.C. § 136. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 ix

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35 U.S.C. § 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 35 U.S.C. § 2(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 35 U.S.C. § 2(b)(2)(A).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 7 35 U.S.C. § 2(b)(2)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 35 U.S.C. § 2(b)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 35 U.S.C. § 2(b)(2)(D).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 7 35 U.S.C. § 41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 35 U.S.C. § 101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 35 U.S.C. § 102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 18 35 U.S.C. § 103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 18 35 U.S.C. § 111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 35 U.S.C. § 112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 35 U.S.C. § 120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 35 U.S.C. § 121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 19 35 U.S.C. § 122. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 35 U.S.C. § 122(b)(2)(B)(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 35 U.S.C. § 131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 17, 18 35 U.S.C. § 132. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 35 U.S.C. § 132(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 41 35 U.S.C. § 132(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13 35 U.S.C. § 151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 35 U.S.C. § 154(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 33 35 U.S.C. § 154(d)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 35 U.S.C. § 154(d)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 x

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35 U.S.C. § 171. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 35 U.S.C. § 200. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 35 U.S.C. § 251. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 35 U.S.C. § 261. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 33 44 U.S.C. § 3516. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 49 U.S.C. §§ 32901-19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 LEGISLATIVE MATERIALS American Inventors Protection Act of 1999, Pub. L. No. 106-113, § 4405(b)(1), 113 Stat. 1501 (1999).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 S. Rep. 82-1979 (1952), reprinted at 1952 U.S.C.C.A.N. 2394, 2400. . . . . . . . . . . . . . . . . . . . . 10 RULES Local Civ. R. 56(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Fed. Cir. R. 1(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Fed. R. Civ. P. 37(b)(2)(A)(v). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Fed. R. Civ. P. 41(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Sup. Ct. R. 39.8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 EXECUTIVE ORDERS Exec. Order No. 12,866, 58 Fed. Reg. 51735 (Sept. 30, 1993). . . . . . . . . . . . . . . . . . . . . 24, 48, 49 REGULATIONS 37 C.F.R. § 1.105 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 37 C.F.R. § 1.105(c) (2006).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 37 C.F.R. § 1.183 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 37 C.F.R. § 10.18(b)(2)(i) (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 37 C.F.R. § 10.77(b) (2006).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 xi

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FEDERAL REGISTER Changes to Implement the Patent Business Goals, 63 Fed. Reg. 53497, 53506-08 (Oct. 15, 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Changes To Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications; Final Rule, 72 Fed. Reg. 46716 (Aug. 21, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Changes to Practice for the Examination of Claims in Patent Applications, 71 Fed. Reg. 61 (Jan. 3, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 43 Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims, 71 Fed. Reg. 48 (Jan. 3, 2006). . . . . 45 MANUAL OF PATENT EXAMINATION PROCEDURE MPEP § 714(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 37 MPEP § 706.07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 MISCELLANEOUS Archie R. McCrady, PATENT OFFICE PRACTICE 115 (1928) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Philippe Signore, The New Provisional Rights Provision, 82 J. Pat. & Trademark Off. Soc'y, 742, 745 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Thomas Schneck, The Duty to Search, 87 J. Pat. & Trademark Off. Soc'y 689 (2006). . . . . . . . 31

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TABLE OF ABBREVIATIONS FOR CITATIONS TO COURT FILINGS Abbreviation GSK Am. Compl. GSK Opp. Filing Verified Amended Complaint, Dkt. No. 5, 1:07cv1008 GlaxoSmithKline's Opposition to Defendants' Motion for Summary Judgment Against the "GlaxoSmithKline" Plaintiffs, Dkt. No. 252, 1:07cv846 Brief of Amici Curiae Polestar Capital & Norseman Group in Support of Plaintiffs, Dkt. No. 173, 1:07cv846 Memorandum in Support of Defendants' Motion to Strike, Dkt. No. 250, 1:07cv846 First Amended Complaint for Declaratory and Injunctive Relief and Petition for Review of Rulemaking, Dkt. No. 14, 1:07cv846 Plaintiff Triantafyllos Tafas' Memorandum of Law In Opposition to Defendants' Summary Judgment Motion, Dkt. No. 253, 1:07cv846 Defendants' Memorandum in Opposition to GlaxoSmithKline's Motion for Summary Judgement, Dkt. No. 246, 1:07cv846 Memorandum in Support of Defendants' Motion for Summary Judgment, Dkt. No. 127, 1:07cv846 Defendants' Memorandum in Opposition to Plaintiff Triantafyllos Tafas's Motion for Summary Judgment, Dkt. No. 247, 1:07cv846

Polestar Br.

Strike Mem.

Tafas Am. Compl.

Tafas Opp.

USPTO GSK Opp.

USPTO Mem.

USPTO Tafas Opp.

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Defendants Jon W. Dudas and the United States Patent and Trademark Office (collectively "USPTO" or "Office") respectfully submit this memorandum in support of their motions for summary judgment against Plaintiff Triantafyllos Tafas ("Tafas") and the GlaxoSmithKline Plaintiffs ("GSK"), and in rebuttal to the Plaintiffs' memoranda in opposition to the USPTO's summary judgment motions.1 See Pl. Triantafyllos Tafas' Mem. of L. In Opp. to Defs. Summ. J. Mot., Dkt. No. 253 ("Tafas Opp."); GlaxoSmithKline's Opp. to Defs. Mot. for Summ. J. Against the "GlaxoSmithKline" Pls., Dkt. No. 252 ("GSK Opp."). INTRODUCTION The Final Rules concerning claims and continuations practice represent a lawful, careful, and critically important exercise of the USPTO's expressly-delegated rulemaking authority.2 The product of more than two years of study, the rules reflect the USPTO's commitment to keeping pace with a burgeoning patent system by enacting procedural reforms that are tailored to redress the most pressing problems facing the agency. Unable to show that the Final Rules are unlawful, GSK resorts to mischaracterizing them as "mechanical limits" and "caps," and claiming that the USPTO has conceded points that it has always contested. Tafas similarly mischaracterizes the Final Rules, but also uses his opposition memorandum to impermissibly "adopt" arguments of amici and to set forth facts about himself and his business that he conceded in his summary judgment motion were irrelevant to a facial challenge to the rules. Both plaintiffs use their opposition memoranda to try to enlarge the

Rather than responding to Plaintiffs' briefs in two separate memoranda of up to twentyfive pages each, the USPTO has combined its response into a single brief of fifty pages. See Dkt. No. 102, Am. Order, Dec. 5, 2007. Changes To Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications; Final Rule, 72 Fed. Reg. 46716 (Aug. 21, 2007) ("Final Rules") (Mem. in Supp. of Defs. Mots. for Summ. J. ("USPTO Mem."), Dkt. No. 127, Ex. 1). 1
2

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claims in their amended complaints ­ efforts this Court should see through and disallow.3 In the end, Plaintiffs fail to show that their desire to stave off change justifies enjoining lawful rules. The Court should grant the USPTO's summary judgment motions and allow the Final Rules to take effect. ARGUMENT I. THE FINAL RULES ARE CONSISTENT WITH THE PATENT ACT A. The Final Rules Were Promulgated Pursuant to Expressly Delegated Rulemaking Authority and Are Thus Eligible for Chevron Deference

Plaintiffs admit, as they must, that an agency's rules are entitled to Chevron deference when they are promulgated pursuant to an express delegation of rulemaking authority. See GSK Opp. at 5-6; Tafas Opp. at 12; Chevron USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984). Indeed, Plaintiffs' own cases leave no doubt that a Congressional delegation of rulemaking authority is the touchstone of Chevron deference. Tafas Opp. at 12 (citing United States v. Mead Corp., 533 U.S. 218, 226-27 (2001) (holding that regulations "qualif[y] for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law")); GSK Opp. at 5 (citing Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1380-81 (Fed. Cir. 2001) (quoting Mead, 533 U.S. at 226-27); Atchison, Topeka & Santa Fe Ry. Co. v. Pena, 44 F.3d 437, 441 (7th Cir. 1994) (en banc)). As the USPTO has shown, 35 U.S.C. § 2(b)(2) expressly delegates to the Office authority to enact the Final Rules. Plaintiffs offer no reason why Final Rules 78 and 114, which address how many times applicants may appear before the agency, revising old applications, before they

Compare, e.g., Tafas Am. Compl. ¶ 6 (asking the Court to "prevent Defendants from implementing sections 1.75, 1.78, 1.114, 1.265 and 1.704"), with Tafas Opp. at 1 (asking the Court to "enjoin the USPTO from implementing sections 1.75, 1.78, 1.104, 1.105, 1.110, 1.114, 1.142, 1.265 and 1.704"). The additional rules that Tafas now asks to have enjoined are not properly before the Court. 2

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must submit a petition to justify further continuing applications and requests for continued examination ("RCE"), do not fall within the plain language of § 2(b)(2). They clearly do. These rules "govern the conduct of proceedings in the Office," id. § 2(b)(2)(A), by focusing, "facilitat[ing] and expedit[ing] the processing of patent applications," id. § 2(b)(2)(C). By curtailing delays in prosecution, they further "govern the . . . conduct of agents, attorneys, or other persons representing applicants or other parties before the Office." Id. at § 2(b)(2)(D). Final Rules 75 and 265, which address the information that applicants must provide the Office when they submit applications that contain burdensome numbers of claims, similarly fall within the plain language of § 2(b)(2)(A) and (C) and are thus entitled to Chevron deference.4 GSK criticizes the USPTO for not citing Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990), in its opening summary judgment brief, but that case is inapposite. GSK Opp. at 7. As the USPTO explained in responding to GSK's summary judgment motion, see Defs. Mem. in Opp. to GlaxoSmithKline's Mot. for Summ. J. ("USPTO GSK Opp."), Dkt. No. 246, at 7, the Supreme Court declined to defer to the Department of Labor in Adams Fruit because the agency had attempted to regulate "the scope of judicial power" by determining when private rights of action existed in federal court. Id. at 650. Here, by contrast, the USPTO has enacted rules to govern the proceedings in its own Office, not the federal courts, and Congress has expressly delegated it the authority to do so. See 35 U.S.C. § 2(b)(2). Moreover, unlike the USPTO, the

Tafas argues that neither "35 U.S.C. § 2(b)(2), nor any other statutory provision, expressly or impliedly authorizes the USPTO to make rules that `carry the force and effect of law.'" Tafas Opp. at 13. This is plainly incorrect. Although the parties may dispute whether the Final Rules fall within the parameters of the § 2(b)(2) powers, it cannot be disputed that § 2(b)(2) authorizes the USPTO to promulgate some regulations that have the force and effect of law. See, e.g., Norton v. Curtiss, 433 F.2d 779, 791 (C.C.P.A. 1970) ("We have long held that [regulations promulgated pursuant to § 2(b)(2)], when not inconsistent with the statutes, have the force and effect of law."). It is unclear why Congress would delegate rulemaking authority to an agency if not to make rules that have the force and effect of law. 3

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Department of Labor did not utilize notice and comment rulemaking. GSK's own case explains that where an agency "has adopted a regulation by notice-and-comment rulemaking pursuant to the Administrative Procedure Act (5 U.S.C. § 553), the Chevron standard, of course, applies." Pesquera Mares Australes, 266 F.3d at 1379 (citing Mead, 533 U.S. at 230). Congress has expressly delegated to the USPTO authority to promulgate rules using APA notice-and-comment procedures. See 35 U.S.C. § 2(b)(2)(B) (authorizing the USPTO to promulgate regulations "in accordance with section 553 of title 5"). Neither Plaintiff explains why § 2(b)(2)(B) does not further evince Congress's intent for the Office's rules to receive Chevron deference. Despite Plaintiffs' acknowledgment that Congressional delegation is the touchstone of Chevron deference, they nevertheless persist in focusing on an irrelevant dichotomy between "substantive" and "procedural" rulemaking.5 The Supreme Court has never found Chevron deference to turn on this dichotomy, and the USPTO has already explained why the discussion of substantive rulemaking authority in Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996), should not control this case. See USPTO Mem. at 17-18 (explaining that Merck is distinguishable on its facts, and that it did not authoritatively interpret the scope of § 2(b)(2) under Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005)).6

In referring to a "false dichotomy" in its opening brief, the USPTO was not suggesting that the distinction between "substantive" and "procedural" rules is never a meaningful one. GSK Opp. at 11 (quoting USPTO Mem. at. 17). The APA itself draws such a distinction in 5 U.S.C. § 553(b) to determine when notice and comment rulemaking is required. Instead, the USPTO was simply explaining that such a dichotomy is irrelevant to the question of Chevron deference, which the Supreme Court has never found to turn on whether rules are substantive or procedural. GSK's attempt to explain in a footnote why Brand X is inapplicable is unavailing. GSK Opp. at 6-7 n. 2. GSK first argues that "Brand X only applies if an agency is entitled to Chevron deference," but as the USPTO has demonstrated, it is so entitled. Id. GSK's remaining arguments ­ that 35 U.S.C. § 120 is purportedly unambiguous and that the doctrine of laches should be used sparingly ­ are irrelevant to whether the Federal Circuit's interpretation of § 2(b)(2) is controlling. Furthermore, the language from Lechmere, Inc. v. NLRB, 502 U.S. 527 4
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Even if the dichotomy were relevant, however, the Final Rules are procedural. Like other procedural rules, the Final Rules "`alter the manner in which parties present themselves or their viewpoints to the agency,'" but do not alter applicants' rights. Am. Hosp. Ass'n v. Bowen, 834 F.2d 1037, 1047 (D.C. Cir. 1987) (quoting Batterton v. Marshall, 648 F.2d 694, 707 (D.C. Cir. 1980)); see also JEM Broadcasting Co. v. FCC, 22 F.3d 320, 327 (D.C. Cir. 1994) (holding that rules were procedural where they established a cut-off date by which applications had to be filed, causing some applicants not to be able to re-file applications); USPTO GSK Opp. at 8-10. Plaintiffs apparently concede that Final Rules 78 and 114 are indistinguishable from rules of judicial procedure that address repetitive and vexatious filings, as they offer no grounds for distinction. USPTO Mem. at 19 (citing Fed. Cir. R. 1(f); Sup. Ct. R. 39.8). GSK argues that the Final Rules are substantive because they allegedly "limit continuing applications, RCEs, and claims" in a way that "affect[s] GSK's substantive rights." GSK Opp. at 4. GSK's argument proceeds from two false premises. First, GSK mischaracterizes the Final Rules. Final Rules 78 and 114 do not impose a mechanical limit on the number of continuing applications or RCEs an applicant may file, but rather put reasonable conditions on such filings. In its opposition to GSK's memorandum, the USPTO discussed the flexible, case-by-case analysis that the agency will undertake to determine whether a petition under Final Rules 78 or 114 is meritorious. See USPTO GSK Opp. at 15-17. Similarly, Final Rules 75 and 265 do not impose a cap on claims. Applicants can submit as many claims as they want as long as they provide information in support of unusually large applications containing more than five

(1992), that GSK quotes simply stands for the principle, articulated again in Brand X, that where courts have determined a statute's unambiguous meaning, an agency's rules may not deviate from that interpretation. GSK Opp. at 6; Brand X, 545 U.S. at 982; id. at 984 (discussing Lechmere). Because the Federal Circuit has not interpreted any of the relevant Patent Act provisions as to unambiguously preclude the Final Rules, Lechmere is irrelevant. 5

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independent or twenty-five total claims.7 Second, the Final Rules do not impinge on any substantive "rights" GSK purports to have under the Patent Act. GSK Opp. at 5. GSK argues that the Final Rules implicate 35 U.S.C. §§ 102 and 103, two of the sections that establish substantive eligibility criteria for patents, but they do not. Claims that would have met the novelty and non-obviousness criteria of these sections before the Final Rules will still meet these criteria under the Final Rules. Because the Final Rules do not seek to interpret provisions like §§ 102 and 103 that define eligibility for a patent, they are not substantive rules under Animal Legal Defense Fund v. Quigg, 932 F.2d 920, 930 (Fed. Cir. 1991), or Chrysler Corp. v. Brown, 441 U.S. 281 (1979).8 GSK Opp. at 4. Further, as discussed later in this brief, neither § 120 nor § 132 unambiguously establishes a "right" to file unlimited continuation applications or RCEs, no matter how delayed those applications may be or how much they burden the agency. See infra, Parts I.B, I.C. Nor do Final Rules 75 and 265 bar applicants from submitting "one or more claims" under § 112. Id., Part I.D. As noted above, applicants may submit as many claims as they want, even when they exceed 5/25 claims; they simply must submit information about their claims to assist in examination. The Final Rules thus are not substantive even under GSK's broad definition.

Tafas's analogy ­ that "the USPTO's approach would be akin to the manager of an amusement park seeking to reduce lines for rides by not admitting anyone to the park" ­ is flawed for the same reasons. Tafas Opp. at 15. The USPTO is clearly letting people into the park. Final Rules 78 and 114 simply prevent a patron from riding the same ride more than four times without good reason when his repeated rides are preventing others from taking a turn. In fact, Chrysler Corp. only underscores the procedural nature of the Final Rules. There, the Supreme Court looked to Morton v. Ruiz, 415 U.S. 199 (1974), for its definition of a substantive rule. Chrysler Corp., 441 U.S. at 302. The Morton Court only found the rules at issue to be substantive because the Bureau of Indian Affairs had changed an "extremely significant eligibility requirement" for American Indians who received benefits from the government; for the first time, beneficiaries had to live on reservations. Morton, 415 U.S. at 236. The USPTO has not altered the eligibility requirements for receiving a patent (e.g., novelty, nonobviousness), but only the procedures for applying for one. 6
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Because the Final Rules fall within the plain language of § 2(b)(2), Plaintiffs can point to no meaningful basis for distinguishing them from the rules in Lacavera v. Dudas, 441 F.3d 1380 (Fed. Cir. 2006), Stevens v. Tamai, 366 F.3d 1325 (Fed. Cir. 2004), and Centigram Commc'ns Corp. v. Lehman, 862 F. Supp. 113 (E.D. Va. 1994), which the Federal Circuit and this Court implicitly or explicitly accorded Chevron deference.9 In Lacavera, the Federal Circuit emphasized that, "[u]nder 35 U.S.C. § 2(b)(2), the PTO has broad authority to govern the conduct of proceedings before it and to govern the recognition and conduct of attorneys." 441 F.3d at 1382-83. Citing Mead and Chevron, the court held that "[b]ecause the PTO is specifically charged with administering this statute, we analyze a challenge to the statutory authority of its regulations under the Chevron framework." Id. The same is true here. Finally, GSK errs in suggesting that if the Court declines to afford the Final Rules Chevron deference, it should afford them no deference at all. GSK's own cases show that the USPTO is at least entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).10 Merck, 80 F.3d at 1550 (affording Skidmore deference); Atchison, Topeka, 44 F.3d at 442 ("That is not to say that interpretive rules, while undeserving of substantial deference under Chevron, do not warrant any deference from a reviewing court."); see also Cathedral Candle Co. v. U.S. Intern. Trade Comm'n, 400 F.3d 1352, 1365 (Fed. Cir. 2005) ("Even if Chevron deference does not apply, an agency's construction of a statute that it is charged with

Tafas attempts to distinguish Lacavera by arguing that it turned solely on the USPTO's exercise of authority under § 2(b)(2)(D), Tafas Opp. at 16, but the Federal Circuit made clear in Lacavera that it was addressing both sources of authority. See Lacavera, 441 F.3d at 1383 ("[T]he PTO has broad authority to govern the conduct of proceedings before it and to govern the recognition and conduct of attorneys."). Moreover, the USPTO has relied on both sources of authority in promulgating the Final Rules. See USPTO Mem. at 14-15. Stevens, too, expressly turned on the USPTO's exercise of its § 2(b)(2)(A) power. Stevens, 366 F.3d at 1333. Tafas concedes that to the extent the Final Rules are "interpretative or procedural," the USPTO should be accorded Skidmore deference. Tafas Opp. at 13. 7
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administering is still subject to some deference under the standard set forth by the Supreme Court in Skidmore . . ."). The additional cases GSK cites are not to the contrary.11 GSK Opp. at 9. B. Final Rule 78 Places Reasonable Conditions on the Filing of Continuing Applications, Consistent with Section 120 of the Patent Act

As the USPTO has explained, 35 U.S.C. § 120 creates a mechanism by which a later-filed application may, under certain conditions, receive the priority date of a pending prior-filed application. See USPTO Mem. at 21; USPTO GSK Opp. at 11. Section 120 does not provide, as GSK contends, that "the PTO shall (i.e. must) accord" every continuing application the priority date of a prior-filed application, no matter how repetitious or vexatious the application may be. GSK Opp. at 12. In fact, § 120 does not speak in terms of "the PTO" at all. See 35 U.S.C. § 120 ("An application . . . shall have the same effect . . .") (emphasis added). Section 120 is simply silent as to how many times the USPTO must process an applicant's recycled continuing applications. Consequently, the Office may exercise its § 2(b)(2) authority to promulgate reasonable regulations.12 Chevron, 467 U.S. at 842-43.

In FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33 (2000), the Supreme Court applied the Chevron framework, but held that it could not afford Chevron deference because the statute unambiguously precluded the FDA's interpretation ­ that is, the regulation failed at Chevron Step One. It is entirely different to utilize the Chevron framework but find that a statute unambiguously precludes a regulation at Chevron Step One, as occurred in Brown & Williamson and is the question to which the USPTO turns next, than to refuse to utilize the Chevron framework at all, as GSK asks this Court to do. The other cases GSK cites either are no different from Brown & Williamson, see Am. Bar Ass'n v. FTC, 430 F.3d 457, 468-70 (D.C. Cir. 2005) (utilizing Chevron framework but finding that regulation failed at Chevron Step One), involve attempts by agencies to interpret statutes that other entities are empowered to administer, Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1265-66 (10th Cir. 2001), or involve an interpretation in a single letter that, unlike the Final Rules, was "made without any degree of deliberation, thoughtful consideration or comments from the public," N.Y. State Bar Ass'n v. FTC, 276 F. Supp. 2d 110, 139 (D.D.C. 2003). By contrast, in Railway Labor Executives Assocation v. National Mediation Board, 29 F.3d 655, 671 (D.C. Cir. 1994) (en banc), cited by GSK, the court held that the text, structure, and legislative history of the statute under review all pointed toward an unambiguous meaning that foreclosed proceeding past Chevron Step One. Here, however, the text does not speak to the 8
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Plaintiffs fail to respond to the USPTO's core arguments regarding the language of § 120. They fail, for example, to explain why the USPTO's interpretation of the phrase "shall have the same effect as" is incorrect, or to counter the history the USPTO cites in support of its argument. See USPTO Mem. at 21-22 (citing Godfrey v. Eames, 68 U.S. 317, 324 (1863)). Plaintiffs also lack any response to the argument that Final Rule 78 merely puts reasonable conditions on when continuation applications may be considered properly "filed" under § 120. USPTO Mem. at 22. Their silence on these central issues speaks volumes. Plaintiffs also offer no evidence that § 120 unambiguously precludes Final Rule 78. To the contrary, their reading of § 120 brings that section into tension with other provisions of the Patent Act, including §§ 112, 121 and 251. See USPTO Mem. at 22-23. GSK objects that "the PTO has applied these sections without any conflict for decades." GSK Opp. at 13. GSK fails to appreciate, however, that the use of continuations practice has changed dramatically over the past several decades in a way that undermines the overall scheme of the Patent Act. "Continued examination filings, other than divisional applications, as a percentage of overall filings, has increased from about 11.4 percent in fiscal year 1980, to about 18.9 percent in fiscal year 1990, to 21.9 percent in fiscal year 2000, to 29.4 percent in fiscal year 2006." 72 Fed. Reg. at 46718. In particular, the number of second and higher continuing applications has exploded, tripling from fewer than 15,000 per year in 1997 to more than 45,000 per year in 2006. A05015 (Ex. 1). Likewise, the number of third and higher continuing applications grew from fewer than 6,500 per year in 1997 to more than 18,000 per year in 2006. Id. Final Rule 78 merely interprets § 120 in a way that allows it to peaceably coexist with §§ 112, 121 and 251 rather than eclipsing those sections. See, e.g., 72 Fed. Reg. at 46754, 46760 (addressing relationship of Final Rules to § 251

question at issue, and Plaintiffs cite no authoritative legislative history or structural arguments that would foreclose the USPTO's reading of § 120. 9

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reissue provision); id. at 46719, 46754, 46768 (discussing relationship of Final Rules to § 112). Turning to legislative history, Tafas cites a single speech by one of the drafters of the Patent Act of 1952, Hon. Giles S. Rich, which Tafas contends shows that § 120 was intended to allow limitless continuation applications. Tafas Opp. at 19. The speech is far more qualified than he suggests.13 Moreover, more authoritative legislative history of the Patent Act of 1952 is silent on this point. See S. Rep. 82-1979 (1952), reprinted at 1952 U.S.C.C.A.N. 2394, 2400. Further, even if one drafter held this view, another principal drafter, P.J. Federico,14 clearly did not. Examiner-in-Chief Federico authored the decision for the Board of Patent Appeals ("Board") in Ex Parte Henriksen, 154 U.S.P.Q. 53 (Bd. of Pat. Appeals 1966) (Federico, Examiner in Chief), which condoned an absolute limit of two continuation applications. Where two of the principal drafters of a statute cannot agree, it is certainly fair to say that "the statute is silent or ambiguous with respect to the specific issue." Chevron, 467 U.S. at 843. Plaintiffs cite no case law that unambiguously precludes Final Rule 78.15 The Office specifically addressed in its Federal Register notice the language of Kingsdown Medical

Tafas distorts Judge Rich's discussion of § 120 by making liberal use of ellipses. The first sentence of Rich's comments on § 120 supports the USPTO's construction of that section, and the remainder attests to its lack of clarity: "Section 120 gives co-pending applications the benefit of the filing date of a parent case, but only if there is in the later application a specific reference to the earlier one. Some people have questioned whether this would apply to more than one succession, one application in succession to one parent; I think that, on careful reading, you will agree that the number of generations of the lineage is unlimited." Address of Giles S. Rich to the New York Patent Law Ass'n, Nov. 6, 1952, reprinted in 75 J. Pat. & Trademark Off. Soc'y 3, 13-14 (1993) (emphases added). See Paulik v. Rizkalla, 760 F.2d 1270, 1277 (Fed. Cir. 1985) (Rich, J. concurring) (identifying Federico as "the key person" in the drafting of the Patent Act of 1952). The USPTO has already addressed In re Henriksen, 399 F.2d 253 (C.C.P.A. 1968), In re Hogan, 559 F.2d 595 (C.C.P.A. 1977), Ex Parte Hull, 191 U.S.P.Q. 157 (Pat. & Trademark Office Bd. App. 1975), and Ricoh Co. Ltd. v. Nashua Corp., 1999 WL 88969 (Fed. Cir. 1999) (unpublished), in its prior briefs. See USPTO GSK Opp. at 11-12 & n.7; USPTO Mem. at 24-25. 10
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Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 874 (Fed. Cir. 1988), that both GSK and Tafas quote. Tafas Opp. at 20; GSK Opp. at 13; 72 Fed. Reg. at 46762. As the USPTO explained there, the Federal Circuit merely noted in Kingsdown that there is nothing wrong with filing a patent application or amending one's claims for the purpose of keeping a competitor's products from the market. 863 F.2d at 874. Final Rule 78 does not prevent an applicant from doing so; an applicant may file an initial application and two continuations for this purpose before it even needs to file a petition. 72 Fed. Reg. at 46839; 37 C.F.R. § 1.78(d)(1)(vi). The Federal Circuit did not say that § 120 confers an unambiguous right to file an unlimited number of continuation applications for this purpose, or to deliberately delay ending prosecution at the examiner level in order to await a competitor's product. See Brand X, 545 U.S. at 982. As the USPTO also made clear in the Federal Register notice, Final Rule 78 is not an effort to codify the doctrine of prosecution laches. 72 Fed. Reg. at 46720. Although In re Bogese, 303 F.3d 1362 (2002), arose in the context of that doctrine, the Federal Circuit confirmed that the USPTO's "authority to sanction undue delay is even broader than the authority of a district court to hold a patent unenforceable" on laches grounds. Id. at 1367 (emphasis added). In fact, "[t]he PTO has inherent authority to govern procedure before the PTO, and that authority allows it to set reasonable deadlines and requirements for the prosecution of applications." Id. at 1368 (citing 35 U.S.C. § 2). Final Rule 78 is an exercise of the USPTO's rulemaking authority under 35 U.S.C. § 2(b)(2), not an attempt to rely on an equitable doctrine. Plaintiffs thus err in attempting to confine the Office's rulemaking authority using cases that define the parameters of prosecution laches. See, e.g., Symbol Techs., Inc. v. Lemelson Med., Educ., & Res. Found., LP, 422 F.3d 1378, 1385 (Fed. Cir. 2005) ("Symbol IV"). The Federal Circuit indeed stated in Symbol IV that "[t]here are legitimate grounds for refiling a patent application which should not normally be grounds for a holding of laches" and provided 11

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examples of such legitimate grounds. Id. (emphasis added). But Final Rule 78 does not aim to enforce the doctrine of prosecution laches. Moreover, even Symbol IV recognized that while there may be legitimate grounds to once, or perhaps even twice, "refile an application," such refiling may not be "unduly successive or repetitive." 422 F.3d at 1385. Final Rule 78 is a reasonable attempt to rein in unduly successive and repetitive continuing applications. See 72 Fed. Reg. at 46719. The rule does not create a "hard limit" on continuing applications. GSK Opp. at 12-13. The USPTO has explained at length the flexible, "case-by-case" analysis that it will undertake in evaluating petitions.16 USPTO GSK Opp. at 1617 (citing 72 Fed. Reg. at 46770-79). The USPTO has also identified at least four examples of when the Office expects to grant petitions. Id. (citing 72 Fed. Reg. at 46773-76); cf. GSK Opp. at 13 n. 9 (incorrectly stating that "PTO fails to identify a single set of circumstances that would satisfy the standard"). To the extent that Plaintiffs are concerned that any specific application of Final Rule 78 will harm them, they may later challenge the denial of a petition in federal court. See 72 Fed. Reg. at 46779. The Court cannot, on this facial challenge, tolerate bald speculation about how the USPTO may someday effectuate a rule that is to be implemented on a "case-bycase" basis. See USPTO GSK Opp. at 15-16. On its face, Final Rule 78 must stand. C. Final Rule 114 Comports With Section 132

Plaintiffs remarkably deduce from the sentence, "[t]he Director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant" that applicants may submit unlimited requests for continued examination ("RCE"). 35 U.S.C. § 132(b); GSK Opp. at 17; Tafas Opp. at 22. The plain text of this section does not

The Bogese Court did not state, as GSK claims, that "the PTO lacks the ability to impose `a mechanical rule based on a misconstruction of the statutory requirements,'" but even if it had, Final Rule 78 does not establish a "mechanical rule" or misconstrue § 120. GSK Opp. at 16 (quoting Bogese, 303 F.3d at 1368 n.6). 12

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support their reading. The word "shall" simply directs the Office to "prescribe regulations," while the phrase "to provide for the continued examination of applications" specifies the focus of those regulations. Because Section 132(b) is silent on the number of RCEs that applicants may file, the USPTO may exercise its authority under both §2(b)(2) and § 132(b) itself to prescribe reasonable regulations regarding the number of times an applicant may prolong prosecution at the examiner level rather than appealing a rejection to the Board. Chevron, 467 U.S. at 842-43. Final Rule 114 is such a reasonable regulation, working in concert with Final Rule 78 to allow an applicant two continuing applications and one RCE in each application family, before filing a petition and making a showing to justify further filing (the "2+1 Rule"). GSK argues for the first time that Final Rule 114 may not operate at the level of the application family, even though Final Rule 78 does the same. GSK Opp. at 17-18. Cobbling together disparate text, GSK "read[s] together" §§ 131, 132(a), and 132(b) to conclude that the statutes "require the PTO to examine applications and provide for the continued examination of applications--not each application family."17 Id. at 18. But none of those provisions ­ read together or alone ­ unambiguously requires the USPTO to accept an RCE for each and every application in a string of virtually indistinguishable continuation applications.18 Final Rule 114 sets reasonable conditions on the filing of more than one RCE in an application family so that applicants will no longer be able to force the Office to re-examine ­ ad infinitim ­ the same rejected applications,

GSK also throws into the mix language from the unremarkable effective date provision of the American Inventors Protection Act of 1999, Pub. L. No. 106-113, § 4405(b)(1), 113 Stat. 1501 (1999), but the USPTO has already addressed why this provision has no bearing on the issue. See USPTO GSK Opp. at 14-15. Tafas reiterates GSK's error. Tafas Opp. at 22. Indeed, § 131 does not concern RCEs at all. It simply provides for the examination of applications generally. See 35 U.S.C. § 131. 13
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while new applications languish in the backlog.19 D. Final Rules 75 and 265 Are Consistent With Section 112

As GSK well knows, the USPTO is not arguing that "it may limit the number of claims an applicant may submit." GSK Opp. at 19. Final Rules 75 and 265 allow applicants to submit as many claims as they want; they must, however, provide information to assist in examination if they wish to submit more than five independent or twenty-five dependent claims (the "5/25 Rule"). These rules thus could not conflict with 35 U.S.C. § 112, ¶ 2, as GSK alleges, because applicants may still submit "one or more claims."20 GSK fails to meaningfully distinguish Application of Rubinfield, 270 F.2d 391, 395 (C.C.P.A. 1959), where the Court of Customs and Patent Appeals ("C.C.P.A.") held (not stated in dicta, as GSK claims) that even limiting design patents to only one claim was consistent with

GSK improperly introduces a new "arbitrary and capricious" claim in a footnote to its § 132 argument, contending that the USPTO should have to explain why it has allegedly departed from the "prior construction of" § 132 embodied in rules that it promulgated in 2000. GSK Opp