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REPLY to Response to Motion re 135 MOTION for Summary Judgment Plaintiff Tafas's Reply in Response to USPTO's Opposition to Tafas's Motion for Summary Judgment filed by Triantafyllos Tafas. (Attachments: # 1 Exhibit Ex 1 to Tafas Reply in Support of Mot. for Summ. J.# 2 Exhibit Ex 2 to Tafas Reply in Support of Mot. for Summ. J.# 3 Exhibit Ex 3 to Tafas Reply in Support of Mot. for Summ. J.# 4 Exhibit Ex 4 to Tafas Reply in Support of Mot. for Summ. J.# 5 Exhibit Ex 5 to Tafas Reply in Support of Mot. for Summ. J.# 6 Exhibit Ex 6 to Tafas Reply in Support of Mot. for Summ. J.)(Wilson, Joseph)

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA (Alexandria Division) TRIANTAFYLLOS TAFAS, Plaintiff, v. JON W. DUDAS, in his official capacity as Under-Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, and the UNITED STATES PATENT AND TRADEMARK OFFICE, Defendants. SMITHKLINE BEECHAM CORPORATION, v. Plaintiff, CIVIL ACTION: 1:07cv846 (JCC/TRJ) and Consolidated Case (below)

JON W. DUDAS, in his official capacity as Under-Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, and the UNITED STATES PATENT AND TRADEMARK OFFICE, Defendants.

PLAINTIFF TRIANTAYLLOS TAFAS' REPLY TO DEFENDANTS' MEMORANDA IN OPPOSITION TO PLAINTIFFS' SUMMARY JUDGMENT MOTIONS Steven Moore, Esq. (Pro Hac Vice) James E. Nealon, Esq. (Pro Hac Vice) William R. Golden Jr., Esq. (Of Counsel) KELLEY DRYE & WARREN LLP 101 Park Avenue New York, New York 10178-0002 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] [e-mail] [e-mail] Joseph Dale Wilson, III, Esq. (VSB#43973) KELLEY DRYE & WARREN LLP Washington Harbor, Suite 400 3050 K Street, NW Washington, DC 20007 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail]

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TABLE OF CONTENTS Page PRELIMINARY STATEMENT ................................................................................................... 1 ARGUMENT................................................................................................................................. 4 A. B. The USPTO's Exercise Of Rulemaking Authority Is Substantive And Does Not Qualify For Chevron Deference ............................................................ 4 The USPTO'S Final Rules Are Not Consistent With The Patent Act or Other Law .............................................................................................................. 8 1. 2. 3. 4. 5. 6. 7. 8. 9. C. D. E. 35 U.S.C. §120........................................................................................... 8 35 U.S.C. § 132........................................................................................ 10 35 U.S.C. § 112........................................................................................ 13 35 U.S.C. §§ 101, 102, 111, 131 and 151 ................................................ 15 Patent Cooperation Treaty ....................................................................... 19 35 U.S.C. § 121........................................................................................ 21 35 U.S.C. § 122........................................................................................ 22 35 U.S.C. §§ 41, 112................................................................................ 23 35 U.S.C. §§ 200-212 .............................................................................. 25

The Final Rules Are a Result Of Arbitrary And Capricious Rulemaking ........... 25 The Final Rules Are Not A Logical Outgrowth Of The Proposed Rules ............ 31 The Final Rules Are Retroactive And Result In An Unconstitutional Taking Under the Fifth Amendment and Due Process Clause of the Constitution.......................................................................................................... 32 The USPTO Has Violated Article I, Section 8 Of The U.S. Constitution In The Promulgation Of The Final Rules................................................................. 33 The Final Rules are Invalid in Not Providing Sufficient Notice to Applicants of How to Comply With An ESD...................................................... 35 The Final Rules Were Promulgated In Violation Of The Regulatory Flexibility Act ...................................................................................................... 36 The USPTO's Assertions of Continuation Practice Abuse Is Not Supported By The Evidence ................................................................................ 40

F. G. H. I.

CONCLUSION............................................................................................................................ 40

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TABLE OF AUTHORITIES CASES Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990)..........................................................5, 14 Airlines Traffic Offices, Inc. v. Department of Defense, 87 F.3d 1356 (D.C. Cir. 1996) ............................................................................................................................38 Atlantic Fish Spotters Association v. Daley, 8 F. Supp. 2d 113 (D. Mass. 1998).............38 Atlantic Thermoplastics Co., Inc. v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992) ..........23 Brown v. Gardner, 513 U.S. 115 (1994)............................................................................12 Brown & Williamson Tobacco Corp. v. FDA, 153 F.3d 155 (4th Cir. 1998) .....................6 Christensen v. Harris Cty., 529 U.S. 576 (2000) .................................................................6 Chrysler Corp. v. Brown, 441 U.S. 281 (1979) ...................................................................6 Eldred v. Ashcroft, 537 U.S. 186 (2002) ...........................................................................34 Eli Lilly & Co. v. Board of Regents of the University of Washington, 334 F.3d 1264 (Fed. Cir. 2003).....................................................................................................6 Ex Parte John E. Maloney et al., 1999 WL. 33205694 (Bd. Pat. App. & Interf. 1999) ............................................................................................................................13 IXPL Holdings, 4430 F.3d 1377 (Fed. Cir. 2005) .............................................................24 In re Bogese, 22 U.S.P.Q. 2d 1821 (Comm'r Pat. 1991) ...................................................12 In re Henriksen, 399 F.2d 253 (C.C.P.A. 1968) ..................................................................7 In re Longi, 759 F.2d 887 (Fed. Cir. 1985)........................................................................18 In re Oetiker, 977 F.2d 1443 (Fed. Cir. 1992) ...................................................................17 In re Piascki , 745 F.2d 1468 (Fed. Cir. 1984)...................................................................17 In re Wakefield, 422 F.2d 897 (C.C.P.A. 1970) ................................................................13 In re Warner, 379 F.2d 1011 (CCPA 1967).......................................................................17

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In the Application of Don L. Rubinfield, 270 F.2d 391 (C.C.P.A. 1959) .........................13 Irons v. Diamond, 670 F.2d 265 (D.C. Cir. 1981).............................................................23 Landgraf v. USI film Products, 511 U.S. 244 (1994) ........................................................32 Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) ...................................................................7 Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996) .................................................5, 6 Morall v. DEA, 412 F.3d 165 (D.C. Cir. 2005).................................................................31 North Carolina Fisheries Association v. Daley, 16 F. Supp. 2d 647 (E.D. Va. 1997) ............................................................................................................................37 North Carolina Fisheries Association v. Daley, 27 F. Supp. 2d 650 (E.D.Va. 1998) ......................................................................................................................36, 38 Studiengesellschaft Kohle mbH v. Northern Petrochemical Co., 784 F.2d 351 (Fed. Cir. 1986)............................................................................................................21 Paralyzed Vets. of America v. Secretary of Veterans Affairs, 308 F.3d 1262 (Fed. Cir. 2002) .....................................................................................................................10 Penn Central Transportation Co. v. City of New York, 483 U.S. 104 (1978)...................33 Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372 (Fed. Cir. 2001) ............5 Ricoh Co. Ltd. v. Nashua Corp., 185 F.3d 884, 199 WL. 88969 (Fed. Cir. 1999)..............7 Ruckelhaus v. Monsanto Co., 467 U.S. 986 (1984) ..........................................................33 See Southern Offshore Fishing Association ., Daley, 995 F. Supp. 1411 (M.D. Fla. 1998) ...............................................................................................................37, 38 Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250 (10th Cir 2001) .................................6 Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565 (Fed. Cir. 1991) .....................................................................................................................23 Skidmore v. Swift & Co., 323 U.S. 134 (1944)...................................................................6 Tafas v. Dudas, 511 F. Supp. 2d 652 (E.D.V.A. 2007) .......................................................1 Tafas v. Dudas, 2008 WL. 112043 (Jan. 9, 2008) .............................................................26

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STATUTES 5 U.S.C. § 553(b) .................................................................................................................4 5 U.S.C. § 706 ...................................................................................................................19 71 Fed. Reg. at 46769-76.....................................................................................................8 72 Fed. Reg. 161, 46830 (A.09505).....................................................................................4 72 Fed. Reg. 46717 ............................................................................................................35 72 Fed. Reg. 46719 ............................................................................................................35 72 Fed. Reg. 46748 ............................................................................................................27 72 Fed. Reg. 46753 ............................................................................................................35 72 Fed. Reg. 46757 ............................................................................................................28 72 Fed. Reg. 46765 ............................................................................................................27 72 Fed. Reg. 46773 ..............................................................................................................8 72 Fed. Reg. 46774 ..............................................................................................................8 72 Fed. Reg. 46776 ........................................................................................................9, 29 72 Fed. Reg. 46780 ............................................................................................................18 72 Fed. Reg. 46,834 ...........................................................................................................32 35 U.S.C. § 101..................................................................................................................16 35 U.S.C. §§ 101, 102, 111, 131........................................................................................15 35 U.S.C. § 102..................................................................................................................16 35 U.S.C. § 111(a)(1).........................................................................................................16 35 U.S.C. § 112..................................................................................................................13 35 U.S.C. §112...................................................................................................................23 35 U.S.C. §120 ................................................................................................................7, 8 -iv-

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35 U.S.C. § 121............................................................................................................21, 22 35 U.S.C. § 122..................................................................................................................22 35 U.S.C. § 131..................................................................................................................16 35 U.S.C. § 132............................................................................................................10, 11 35 U.S.C. § 132(a) .............................................................................................................10 35 U.S.C. § 133..................................................................................................................18 35 U.S.C. §§ 134, 141........................................................................................................18 35 U.S.C. § 151..................................................................................................................16 35 U.S.C. § 2(b)(2) ............................................................................................................18 35 U.S.C. §2 ....................................................................................................................11 35 U.S.C. § 200 et seq........................................................................................................25 35 U.S.C. §§ 200-212 ........................................................................................................25 35 U.S.C. § 2(b)(2) ........................................................................................................5, 19 35 U.S.C. §§ 41, 112....................................................................................................23, 24 142 Cong. Rec. S3242, S3245 ...........................................................................................37 American Inventors Protection Act of 1999, Pub. L. No. 106-113, § 4405(b)(1) (1000)...........................................................................................................................10 FRCP 8...............................................................................................................................21 FRCP 15(a) ..................................................................................................................11, 21 FRCP 15(b) ..................................................................................................................11, 17 Final Rules, 72 Fed. Reg. at 46742....................................................................................17 Request for Continued Examination Practice and Changes to Provisional Application Practice, 65 Fed. Reg. 50,092, 50,095 (Aug. 16, 2000).............................9

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PRELIMINARY STATEMENT The Plaintiff, Dr. Trianatfyllos Tafas ("Dr. Tafas") submits this reply to Defendants' Memoranda in Opposition to Tafas' and GSK's Motions for Summary Judgment dated January 22, 2008 (Docket Nos. 247 and 246, respectively).1 As stated so eloquently by amicus Elan Pharmaceutical during the hearing that preceded the Court preliminarily enjoining the USPTO's new rules in Tafas v. Dudas, 511 F. Supp.2d 652 (E.D.V.A. 2007)("Tafas I"), the development and future availability of cutting edge, desperately needed life-saving medical advances may well turn on whether the USPTO succeeds in upholding its new rules, which are designed to serve the USPTO's own administrative convenience at the expense of innovation:
[I]f these rules go into effect tomorrow...there will be much less incentive for pharmaceutical companies, biotech companies, and all innovators to develop new drugs. Because if there is not going to be robust patent protection -- these companies spend millions, billions of dollars on research and development each year. Without patent protection to protect that investment, there will be less incentive to do that. That means there will be less drugs to help -- lifesaving drugs to help the public in the future...

October 31, 2007 Preliminary Injunction Hearing Tr. at pp. 37-38. As part of a cynical misdirection play, the USPTO and its small group of amici have jumped on the "research for nothing" bandwagon and disingenuously sought to mischaracterize this case as one involving "special interests" (e.g., the pharmaceutical companies) seeking to block the USPTO's rules solely to perpetuate their own selfish interests to

Rather than file a single brief, the USPTO filed separate memoranda in opposition to Tafas' and GSK's motions for summary judgment. The USPTO addressed all arguments raised by both Tafas and GSK in its Memorandum In Opposition to GSK's Motion for Summary Judgment (No. 246)("USPTO Opp. Mem. I") and addressed only the additional arguments raised exclusively by Tafas in the USPTO's Memorandum in Opposition to Tafas' Motion for Summary Judgment (No. 247)("USPTO Opp. Mem. II"). 1

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the detriment of the public. Nothing could be further from the truth. These new rules will have a draconian adverse effect on businesses and inventors of all stripes -- large and small. Defendants castigate GSK suggesting that arguments made by such "industry giants" should be taken with a "grain of salt" because they are not congruous with the views of "entrepreneurs who are considering starting and expanding businesses." 2 The disingenuous nature of the USPTO's purported concern for individual inventors and small businesses is amply demonstrated by the fact that Defendants have condescendingly sought to ignore Dr. Tafas throughout these proceedings notwithstanding that he is the very type of small entrepreneur the USPTO contends somehow benefit from the new rules. It was Dr. Tafas -- an entrepreneur, an immigrant, a former professor of the University of Athens -- who could not take solace in his name being hidden behind the facade of a multi-billion dollar company being the named plaintiff, who was the first to challenge the USPTO's new rules. Tafas filed this action because of his heart felt belief that the U.S. patent system, and the protections and benefits it affords small companies and independent inventors, was essentially being radically dismantled by the USPTO in a misguided and misdirected effort to rid itself of a self-induced backlog of unexamined patent applications. Dr. Tafas challenged the Final Rules in part to thank his new country (the U.S.) for affording him the opportunity to pursue a dream effectively denied to him under the far more restrictive, big business oriented patent systems of Europe, and his native country, Greece, that is, of obtaining the capital and support necessary for the development of a radical invention -- a robotic microscope capable of automatically reading and analyzing tissues on microscope slides.

2

Def's Opp. Mem. to Plaintiff's Motion for TRO and Preliminary Injunction at 38. 2

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Dr. Tafas' present research relates to the use of his robotic microscope, along with proprietary cell labels to detect cancer in a very early stage by monitoring blood samples that could be taken and analyzed in the future as part of routine medical visits. His system holds out the promise of a cost effective technique that could be applied on a mass scale to detect early stage cancers before they metastasize and become effectively untreatable. Dr. Tafas knows that he was able to obtain the capital he needed to start and grow his company (Ikonysis, Inc.) because of a patent system that equally balanced the rights of large and small companies and provided the protections necessary so that investors were willing to make an informed gamble on the dreams of one wide-eyed scientist, and a relatively few patent applications. Dr. Tafas filed this case one (1) day after the Final Rules were published and is the original architect of the primary legal arguments now being made by himself and GSK in opposition to the new rules. Tafas continued alone in this case for nearly two months after the filing of his initial complaint and preliminary injunction motion regardless of some naysayers, who while fully supporting his main arguments, openly questioned whether a "small inventor" could possibly prevail in a challenge against the USPTO's unlimited resources and might. And although nearly everyone supported him, no one, not a single entity or party, proffered Dr. Tafas any monetary aid in his endeavor. Nevertheless, Dr. Tafas trudged on alone until GSK entered the fray in mid-October 2007. In sum, Dr. Tafas is inconvenient for the USPTO because he cannot fairly be characterized as a huge multi-national corporation, a "patent troll," or a "crack-pot inventor." Dr. Tafas is simply the epitome of the American Dream and one of an increasingly rare breed of individuals prepared to stand for their principles, and do what they believe is right, regardless of the risk and costs to themselves, even with a recognition that in our society often only the large and powerful are ever applauded as "heroes." 3

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ARGUMENT A. The USPTO's Exercise Of Rulemaking Authority Is Substantive And Does Not Qualify For Chevron Deference In its Notice of Rulemaking and throughout this case, the USPTO has repeatedly taken the position that its new rules are "procedural" or "interpretive" in nature3 and, therefore, are exempt from notice and comment rulemaking under 5 U.S.C. § 553(b):
[T]he changes being adopted in this notice do not change the substantive criteria of patent eligibility and do not effectively foreclose the applicant's opportunity to make a case on the merits (i.e., the changes in the final rules continue to provide patent applicants with numerous opportunities). Therefore, these rule changes involve interpretive rules, or rules of agency practice and procedure...Accordingly, prior notice and an opportunity for public comment were not required....

72 Fed. Reg. 161, 46830 (A.09505)(citations omitted)(emphasis added).
These rules are procedural ... they're specifically enacted pursuant to the rulemaking authority that Congress has given the PTO expressly in Section 2(b)(2) of the Patent Act ... These are procedural rules in the sense they are promulgated pursuant to express authority. * * * *

[T]he PTO has acted at the zenith of its authority in promulgating these rules. They are promulgated under Section 2 ... the bottom line is that these are procedural rules that are exactly about governing the conduct of the proceedings of the office.

October 31, 2007 Hearing Tr. at pp. 42 and 49, respectively) (emphasis added). Aware that it has no substantive rule making authority and obviously seeking to distance itself from its above referenced earlier admissions, the USPTO attempts to obfuscate the fact that its Final Rules are substantive (and thus not entitled to any Chevron deference) by now belatedly suggesting that the labeling of Final Rules is simply a matter of semantics. The USPTO contends that the Court need only determine whether "[C]ongress delegated rulemaking Likewise, the law professor amici who support the USPTO concede that the only rulemaking power given to the USPTO by Congress is to "make regulations governing its internal proceedings." (Law Professor Mem. at 4)(No. 232). 4
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authority to the USPTO to promulgate the Final Rules" and that the procedural or substantive nature of the rules is of no moment. As discussed below, the USPTO either entirely misses the point or is once again throwing the Court a "curve ball." The U.S. Supreme Court has made it eminently clear that a precondition for Chevron deference "is a congressional delegation of administrative authority." Adams Fruit Co. v. Barrett, 494 U.S. 638, 640 (1990). 35 U.S.C. § 2(b)(2) limits the USPTO's rule making powers to procedural matters only and does not grant the USPTO substantive or interpretative rule making powers. (See Tafas Mem. in Support of Summary Judgment dated December 20, 2007 at pp. 8-10 and Tafas Mem. in Opp. To Def. Summary Judgment Motion dated January 22, 2007 at pp. 11-18). The USPTO is not entitled to any Chevron deference where, as here, it purports to engage in substantive rule making. See Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1381 n.6 (Fed. Cir. 2001) (citing Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996) for the proposition that the USPTO lacks substantive rulemaking authority, and, as such, may not claim Chevron deference for a substantive rule). Thus, the fact that the Final Rules are substantive is a critical issue, irrespective of the USPTO's conclusory pronouncements otherwise. The Final Rules are clearly substantive, inter alia, in that they retroactively apply to pending applications (destroying the quid pro quo bargain for disclosing a trade secret, that is, the opportunity of future patent rights) and because they limit continuing applications, RCEs and the number of claims.4 The Final Rules provide only illusory outlets to overcome such limitations, as amply demonstrated, inter alia, by the USPTOs own public statements to the Office of Management and Budget ("OMB") discussed infra.
4

See A00432 (Exh. 1) ­ "Why Limit Continuations?" and A00434 (Exh. 1) ­ "Why Limit Claims?" 5

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The Final Rules are also substantive because they inherently affect the rights and obligations of applicants and impose new conditions and burdens on the exercise of statutorily granted patent rights and benefits. See Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (stating that substantive rules are those that "affect [] individual rights and obligations"). Aware of the weakness of its claim of Chevron deference in procedural rulemaking, the USPTO now asserts that it actually has substantive rulemaking authority. (USPTO Opp. Mem. I at 49 n. 30). The fatal flaw with the USPTO's attempted Houdini act is that it runs smack into Federal Circuit precedent that indicates that the USPTO has no substantive rulemaking authority. See Merck & Co. v. Kessler, 80 F.3d 1543, 1549-50 (Fed. Cir. 1996) ("the broadest of the PTO's rulemaking powers ... authorizes the Commissioner to promulgate regulations directed only to `the conduct of proceedings in the [PTO]'; it does not grant the Commissioner the authority to issue substantive rules."); see also, Eli Lilly & Co. v. Bd. of Regents of the University of Washington, 334 F.3d 1264, 1269 n. 1 (Fed. Cir. 2003). As a hedge, the USPTO argues in the alternative that Skidmore deference (as set forth in Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) ("Skidmore")) applies because its Final Rules are merely "interpretative." As explained in the amicus brief of the William Mitchell College of Law, however, Skidmore deference is only given to agency interpretations to the extent they have the "power to persuade." Christensen v. Harris Cty., 529 U.S. 576, 587 (2000). Further, as Congress has not delegated interpretative authority to the USPTO, but rather to the judiciary, Skidmore deference is simply irrelevant. See e.g., Brown & Williamson Tobacco Corp. v. FDA, 153 F.3d 155, 161­62 (4th Cir. 1998); Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1265­66 (10th Cir 2001) ("Because the Secretary lacked authority to interpret the term ... we owe no deference to his interpretation").

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There is no merit to the USPTO's bald contention that its Final Rules are merely "interpretative" of 35 U.S.C. §120 and other applicable Patent Act provisions. First, the Courts have already interpreted Section 120 as providing for unlimited continuations. In re Henriksen, 399 F.2d 253, 254 (C.C.P.A. 1968)5 (there is "no statutory basis for fixing an arbitrary limit to the number of prior applications); concurring in dicta, Ricoh Co. Ltd. v. Nashua Corp., 185 F.3d 884, 199 WL 88969,*3 (Fed. Cir. 1999) ("[S]ection 120, governing continuation applications, does not contain any time limit on an applicant seeking broadened claims."). Once a court has determined a statute's clear meaning, there is no room for assertions of "interpretative" rulemaking. See Lechmere, Inc. v. NLRB, 502 U.S. 527, 536-37 (1992) (Once courts "have determined a statute's clear meaning ... we judge an agency's later interpretation of the statute against our prior determination of the statute's meaning."). Equally importantly, there is nothing within the Final Rules "interpreting" the relevant sections of the Patent Act at issue here. Rather, the Rules impose new substantive burdens, requirements and preconditions on patent applicants that diminishes their statutory rights and effects a de facto modification of the applicable statutory provisions.6

As is acknowledged by the USPTO, the Federal Circuit has adopted the decisions of the CCPA as binding precedent. USPTO Mem. Opp. I at p. 17 n. 9; see, South Corp. v. United States, 690 F.2d 1368, 1370 (Fed. Cir. 1982) (en banc). No deference is mandated with respect to rule-making that is contrary to, or inconsistent with, a statute and regulations may not serve to amend or to modify a statute or to add something to the statute that is not already there and must always be consistent with the statutes they are promulgated under. See e.g., Formula v. Schweiker, 572 F.Supp. 862, 866 (D.D.C. 1983); Ruley v. Nevada Bd. Of Prison Commissioners, 628 F.Supp. 108, 111 (D. Nev. 1986). 7
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B.

The USPTO'S Final Rules Are Not Consistent With The Patent Act or Other Law 1. 35 U.S.C. §120

Irrespective of the USPTO's protestations to the contrary, Final Rule 78 places real limitations upon continuing application practice. This is easily discernable simply by reviewing the USPTO's own responses to public comments seeking clarification as to under what circumstances the USPTO would grant a petition for a third continuing application. The USPTO responded in nearly every case that it will not grant such a petition, including if "the applicant becomes disabled for a lengthy time during pendency of the application." (See 71 Fed. Reg. at 46769­76 and 77, Col. 2, ¶ 3). Even the USPTO's very few responses wherein it indicated that it "will likely grant a petition," are phantoms in the dark. (See 72 Fed. Reg. 46773, col. 2, ¶ 2). For example, the USPTO fails to note that its experimentation and newly discovered evidence exception is limited by its assertion that an "[a]pplicant should exercise reasonable foresight to commence any appropriate experimentation early rather than wait until the examiner makes a rejection or finds applicant's arguments unpersuasive." Id. In other words, the USPTO purports to maintain the right to deny even those petitions based on newly generated data on the grounds that the Applicant should have had the foresight to obtain the data beforehand. Further, the USPTO's contention that a petition would likely be granted if "a final rejection contains a new ground of rejection that could not have been anticipated by the applicant" (citing to 72 Fed. Reg. 46774) is a transparent tautology because the USPTO admits that it will not grant such petitions in very many, if any, cases (what "could not have been anticipated" ­ that the Examiner would cite a manuscript from Mars!). Thus, one is left with a petition (and why a petition would be required in such a case is perplexing) likely being granted when the "Board of Patent Appeals and

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Interferences suggests splitting an application subject to an interference." See 72 Fed. Reg. 46776. The USPTO and its relatively few amici simply ignore the clear wording of Section 120 which mandates that the USPTO "shall" grant an application for a patent the priority date of a previously filed application if filed before the patenting or abandonment of or termination of proceedings on the first application. See 35 U.S.C. § 120. Moreover, the case law severely limits any power the USPTO has under the doctrine of prosecution laches and, whatever limited power there may be, if any, does not extend to authorizing the USPTO to engage in a de facto re-writing of various provisions of the Patent Act.7 Here, the USPTO has essentially taken a very limited exception (i.e., prosecution laches) -- intended to apply only in very narrow and extraordinary fact specific circumstances -and bootstrapped off it to presume in its Final Rules that any applicant seeking to file more than two (2) continuations is guilty of such laches. Along these lines, the USPTO shifts the burden of proof to the applicant to prove otherwise under the Final Rules, although it has no statutory

7

As stated in Symbol Techs. Inc. v. Lemelson Med. Educ. & Research Found., 277 F.3d 1378, 1385 (Fed. Cir. 2002), the doctrine of prosecution laches should only be "used sparingly least statutory provisions be unjustifiably vitiated ... [and] should be applied only in egregious cases of misuse of the statutory patent system." In accord, In re Bogese II, 303 F.3d 1362, 1369 (Fed. Cir. 2002) ("Bogese II") (finding the USPTO's power to reject an application even in a case of unreasonable and extreme delays in prosecution, i.e., prosecution laches, to be limited to situations where the applicant is afforded notice and an opportunity to correct the delay, and implicitly accepting as permitted under the law an applicant who "maintain[s] pendency of an application" to match his claims to a "competitor's products [as they] appear[ed] on the market. Id. at 1369; see also, Kingsdown Medical Consultants Ltd. v. Hollister Inc., 863 F.2d 867, 874 (Fed. Cir. 1988) ("[T]here 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."). The case law is also clear that "the Office cannot deny an applicant the benefit of the filing date of his earliest filed case no matter how many intervening continuing applications" are involved. Ex Parte Hull, 191 U.S.P.Q. 157, 159 (Pat. & Tr. Office Bd. App. 1975). 9

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authority to do so.8 Furthermore, the USPTO adds factual presumptions, which is an indicia of substantive rulemaking. See Paralyzed Vets. of Am. v. Secretary of Veterans Affairs, 308 F.3d 1262, 1266 (Fed. Cir. 2002). 2. 35 U.S.C. § 132

The USPTO offers no legal authority to support its contention that it is not inconsistent with 35 U.S.C. § 132(a) for the USPTO to impose arbitrary limits on RCE filings. Ignoring its own prior interpretation of Section 132 shortly after its enactment that spoke approvingly of an applicant's right to file unlimited RCE filings (see Request for Continued Examination Practice and Changes to Provisional Application Practice, 65 Fed. Reg. 50,092, 50,095 (Aug. 16, 2000) ­ Exhibit 3), the USPTO now futilely tries to distinguish its prior statements regarding RCE practice and Section 132 by asserting that what the USPTO really meant at the time was that it was not going to use its "newly granted" authority under the statute to limit RCE filings. USPTO's Opp. Mem. I at 15. The USPTO also ignores the fact that the American Inventors Protection Act of 1999, Pub. L. No. 106-113, § 4405(b)(1) (1000) makes it clear that Section 132(b) was to apply to all applications filed after June 8, 1995 -- not just one (1) application per family. The USPTO tries to avoid this problem by arguing that Plaintiffs' "all application" argument is based on a mere "unremarkable `effective date' provision." Id. at 14. There is nothing, however, in the statute reflecting a limitation based on a "patent family." In fact, the USPTO can point to NO patent statute promulgated by Congress that limits an applicant's rights based on a "family" distinction. The APA does not permit an administrative agency to change the burden of proof unless explicitly permitted by statute. See Heckler v. Campbell, 461 U.S. 458, 468 (1983); accord, Director, Office of Workers Compensation Programs v. Greenwich Collieries, 512 U.S. 267, 271 ("the assignment of the burden of proof is a rule of substantive law"). 10
8

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Aware that it is not able to substantively rebut Dr. Tafas' Section 132 arguments, the USPTO seeks to evade Tafas' assertion that the USPTO's maintenance of "a first action final rejection practice under which the first Office Action in a continuing application, or in the prosecution of a request for continued examination, may be made final" pursuant to MPEP §706.07(b) and 706.07(h) is inconsistent with 35 U.S.C. § 132 by claiming Dr. Tafas' argument is outside the scope of his Amended Complaint dated September 7, 2007 (the "Amended Complaint")(Docket No. 48). (See USPTO Opp. Mem. II at pp. 12-13). First, Dr. Tafas did "spell out" in his pleading, that: (i) "Section 132 does not empower the Director to deny a continued examination of an application and/or to promulgate regulations having the practical effect of denying an applicant a continued examination of an application" (Amended Complaint, p. 15, ¶ 48); and, (ii) that the "Revised Rules promulgated by the USPTO illegally eviscerate or otherwise alter, ... in derogation of the USPTO's limited rulemaking powers under 35 U.S.C. §2 ... including, but not limited to, ... [i]n restricting the right to file a request for continued examination" ("RCE") to one RCE" (Amended Complaint, p. 18, ¶ 56(j)). Thus, Dr. Tafas' pleading is more than sufficient to meet the liberal notice pleading requirements of Rule 8 of the Federal Rules of Civil Procedure. Even assuming arguendo that was not the case, Dr. Tafas hereby requests and should be granted leave to amend his complaint to amplify his original allegations pursuant to the liberal amendment standard found in Rule 15(a)(2) and 15(b)(1).9
9

The plain text of Fed. R. Civ. P. 15(b)(1), which governs amending pleadings during and after trial, allows a liberal standard of amendment: "... The court should freely permit an amendment when doing so will aid in presenting the merits and the objecting party fails to satisfy the court that the evidence would prejudice that party's action or defense on the merits ..." Fed. R. Civ. P. 15(b)(1). The Fourth Circuit has adhered to FRCP 15(b)(1)'s liberal standard of granting amendments to pleadings. In Medigen of Kentucky, Inc., the Fourth Circuit affirmed the lower court's decision to allow amendments to the complaint just days before trial, finding that "[a]dding the ... claim ... did not change the substance of the case, did not require additional 11

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The cases relied upon by the USPTO to support its contention that an "as-applied" challenge to "first action final rejection" practice are inappropriate here where the challenge is brought under the APA.10 (USPTO Opp. Mem. II at 12). Similarly, the USPTO's reliance on case law generated by its own board (i.e., In re Bogese, 22 U.S.P.Q.2d 1821, 1827 (Comm'r Pat. 1991)) is not persuasive. (USPTO Opp. Mem. II at 13, 14). There simply is no weight given to an argument that "it must be assumed that legislators were aware of the practice" when Section 132 was enacted given the state of U.S. Supreme Court case law (see, e.g. Brown v. Gardner, 513 U.S. 115, 122 (1994)("[W]e dispose of the Government's argument that the VA's regulatory interpretation ... deserves judicial deference due to its undisturbed endurance for 60 year ... there is no other evidence to suggest that Congress was even aware of the VA' interpretative position). The USPTO points to nothing in the history of the Patent Act of 1952 that indicates Congress was aware of the "first office action rejection" practice.11

discovery, and did not prejudice the Commission." Medigen of Kentucky, Inc. v. Public Service Commission of West Virginia, 985 F.2d 164, 168 (4th Cir. 1993). Likewise, in Foxworth, the Court reiterated the liberal standard of amending pleadings found in FRCP 15(b): "The standard for granting leave to amend a civil complaint is very liberal. `In the absence of any apparent or declared reason ­ such as undue delay, bad faith or dilatory motive on the part of the movant ... the leave sought should, as the rules require, be freely given.'" Foxworth v. U.S., 2006 WL 2008722 *1 (E.D.V.A. 2006). For example, Molins PLC v. Quigg, 837 F.2d 1064 (Fed. Cir. 1988) is inapposite as it dealt solely with whether an applicant that sought mandamus in part as to whether the USPTO's FAFR policy should be rescinded, should have the issue resolved given the justicability rules of the D.C. Circuit, rules that allowed the court to weigh the benefit of review against the resultant hardship to a plaintiff in determining whether to take an issue as ripe. Id at 3-4 ("This case is distinguishable from [a] ... facial challenge to the guidelines [which was found] fit for judicial review ... [Here] we have held that Molin's action is not presently fit for judicial review and Molins has failed to demonstrate that delay of review will have a direct and immediate impact upon its primary conduct." Id. at 1068 (emphasis in original)). The USPTO admits plaintiffs in this case "are pursuing a facial challenge of these rules, not an as-applied challenge in a particular case." USPTO Opp. Mem. I at 15. Section 132(a) requires that "[I]f ... the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined." 35 U.S.C. § U.S.C. 132(a). The latter clearly means that the USPTO cannot impose a final rejection in the first action on the merits and 12
11 10

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3.

35 U.S.C. § 112

The USPTO maintains that 35 U.S.C. § 112 does not prohibit the USPTO from imposing stringent barriers to the number of claims that may be made in an application. (USPTO Opp. Mem. I at 18). Incongruously, however, the USPTO admits in the record that the "patent statutes ... do not limit the number of claims (independent or dependent) that may be presented in an application." (A07333 ­ Exhibit 4). Additionally, the USPTO's position is contrary to In re Wakefield, 422 F.2d 897, 900 (C.C.P.A. 1970) and other courts, which have consistently held that "[A]n applicant should be allowed to determine the necessary number and scope of his claims ...." The consistency of this holding has even been acknowledged by the USPTO's own Board of Patent Appeals and Interferences: As to the issue of `undue multiplicity,' it is well established that an applicant has the choice of deciding as to the number of claims so long as they are consistent with the disclosure and the requisite filing fees are paid. Ex Parte John E. Maloney et al., 1999 WL 33205694 (Bd. Pat. App. & Interf. 1999) (nonprecedential) at *2 . Here, Final Rules 75 and 265 clearly contradict 35 U.S.C. § 112 by not allowing an applicant to file "one or more claims" as permitted by the statute. In the Application of Don L. Rubinfield, 270 F.2d 391 (C.C.P.A. 1959) does not imply that the USPTO "certainly can require applicants who file more than five independent claims or more than twenty-five total claims to submit additional information to assist in examination without contravening Section 112." (See USPTO Opp. Mem. I at p. 29). Rather,

that it must instead wait until at least the second action. As further elucidated by Professors Moy and Gorenstein, the history of the practice amply suggests that even before enactment of Section 132, the USPTO understood that such a practice stood on shaky grounds, at best, in fact consistently publishing a defense of the practice as being consistent with its other rules, from its first publication of the Manual of Patent Examining Procedure in 1949 until 1969. William Mitchell Amicus Brief at 18 (Docket No. 169). 13

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Rubinfield only dealt with the very narrow question of whether the USPTO's rule to allow only one (1) claim in a design patent case was valid under then existing statutes pertaining to design patents. The limitation to one (1) claim in design patent applications was upheld solely because the court deemed the design patent statute to limit presentation to only a single inventive concept (Id. at 396). Of course, in that factual context there was "no useful purpose [that] could be served by the inclusion of more than one claim in a design application or patent." Id. at 395. Rubinfield is further distinguishable because it also depended on a "conflict" test between a rule and a statute, which test was effectively overruled by Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990). The USPTO also asserts that its Final Rules do not "purport to `determine the necessary number and scope' of the applicants' claims." (USPTO Opp. Mem. I at p. 19). Whether they "purport" to do so or not is a red herring. The relevant inquiry is whether the Final Rules do have such an effect, which is plainly true because the proposed ESD requirement is nothing more than a poison pill. The USPTO denies this contending that the 5/25-ESD rule imposes minimal regulatory burdens and requires only "simple" showings from applicants: "All [the rules] do is require the submission of an extra document." (See October 31, 2007 Hearing Tr. at 51:17-19). The USPTO's position makes no sense, however, because even taking the USPTO's burden assertions at face value, the reality is that the 5/25-ESD requirement is not only burdensome, but actually an insurmountable barrier for most applicants. (See Tafas Decl., ¶¶ 35, 36 (No. 143); Katznelson Amicus Brief at Appendix E (No. 235); Polestar Capital and Norseman Group Amicus Brief at 12)(No. 173). Dr. Belzer calculates the 5/25 ESD Rule will consume the full time efforts of between 8,000 and 23,000 patent attorneys. (See Tafas' Opposition to USPTO's Summary Judgment Motion at Exhibit 24 )(No.253-254). There are only about 15,000 patent attorneys currently in practice in the United States. Thus, as a practical matter, the 5/2514

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’ESD is likely to bring nearly all other patenting activities to a halt rendering compliance with the 5/25-ESD rule effectively impossible. Furthermore, John Whealen, the USPTO's former solicitor during much of the rule making period, confirmed that the ESD requirement is not a bona fide alternative that the USPTO actually intends applicants to exercise (the true intent behind the ESD requirement being to force applicants to abandon property rights by making them too risky and too impractical to exercise):
If you want all your claims examined up front, you can have it done, but it's going to cost you, you're going to have to do some work, which in the current law of inequitable conduct, nobody's going to want to do.12

4.

35 U.S.C. §§ 101, 102, 111, 131 and 151

Using its typical condescending approach to Dr. Tafas, the USPTO flippantly suggests that Dr. Tafas' challenges to the Final Rules beyond those adopted by GSK (which for the most part simply incorporate the arguments Dr. Tafas made in his original motion for preliminary injunction and complaint), "are largely distractions from the core issues in this case," and "uniformly without merit." (See USPTO Opp. Mem. II at p. 1). Nonetheless, the USPTO demonstrates its genuine serious concern about the persuasiveness of Tafas' arguments by proceeding for nearly as many pages as in its other brief (USPTO Opp. Mem. I, the so-called "GSK" Opposition Memo) vainly attempting to refute Tafas' so-called "additional" arguments. The USPTO urges the Court to "uphold Final Rules 75 and 265 as a reasonable exercise of the USPTO's Section 2(b)(2) authority" and further alleges that 35 U.S.C. §§ 101, 102, 111, 131 and 151 do not preclude the USPTO from requiring an Examination Support Document (ESD) after an artificial threshold number of claims set by the USPTO are exceeded.

12

See Duke University Law School, Fifth Annual Hot Topics in Intellectual Property Law Symposium, http://realserver.law.duke.edu/ramgen/spring06/students/02172006a.rm, at time mark 1:02:58. (Exhibit 2) 15

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(Id. at 1-4). As described below, the USPTO's arguments are unsupported and negated by the plain statutory language. Section 111(a)(1) of the Patent Act mandates that the Director of the USPTO allow for an application to be filed by an applicant "except as otherwise provided in this title." 35 U.S.C. § 111(a)(1). Similarly, Section 101 grants the right to an issued patent "subject to the conditions and requirements of this title." 35 U.S.C. § 101. Section 102 states that "[a] person shall be entitled to a patent unless ..." and then delineates various scenarios as exceptions. 35 US.C. § 102. No right is given to the Director to change the requirements for an application, or for an issued patent, outside of the requirements of the Patent Statutes. Section 151 mandates ("shall") that the Director issue a written notice of allowance to the applicant "[i]f it appears that applicant is entitled to a patent under the law." 35 U.S.C. § 151. Section 131 mandates ("shall") that the Director issue a patent if upon examination "it appears that the applicant is entitled to a patent under the law." 35 U.S.C. § 131. No right is given by the patent statutes to permit the Director to fail to give a notice of allowance or to issue a patent if the applicant has satisfied all of the eligibility requirements of the Patent statutes. Id. The USPTO contends that "by requiring an examination support document ("ESD") when applicants present more than 5/25 claims for examination .. the Office [is not] asking applicants to come forward with a prima facie case of patentability, diverging from current practice where the examiner makes a prima facie case of unpatentability." (USPTO Opp. Mem. II at p. 2). The USPTO contradicts itself, however, in its own commentary to its Final Rules, which indicate that this is exactly what the USPTO intended to do:
A general statement that all of the claim limitations are not described in a single reference does not satisfy the requirement of §1.265(a)(4). Section 1.265(a)(4) requires that the examination support document set out with particularity, by reference to one or more specific claim limitations, why the claimed subject matter is not described in the

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references, taken as a whole. The applicant must explain why a person of ordinary skill in the art would not have combined the features disclosed in one reference with the features disclosed in another reference to arrive at claimed subject matter. The applicant must also explain why the claim limitations referenced render the claimed subject matter novel and non-obvious over the cited prior art.

Final Rules, 72 Fed. Reg. at 46742. The Federal Circuit, and its predecessor court, the Court of Customs and Patent Appeals, have consistently recognized that the patent statutes place the initial burden on the Examiner to demonstrate unpatentability. See, e.g., In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992) ("[T]he examiner bears the initial burden, on review of the prior art or on any other ground, of presenting a prima facie case of unpatentability. If that burden is met, only then does the burden of coming forward with evidence or argument shifts to the applicant."); In re Piascki , 745 F.2d 1468, 1472 (Fed. Cir. 1984)(same); In re Warner, 379 F.2d 1011, 1916 (CCPA 1967) (decision collecting and analyzing authorities). As stated in In re Warner, the preamble of section 102 makes clear that the initial burden must be on the USPTO:
We think the precise language of 35 U.S.C. §102 that "(a) person shall be entitled to a patent unless," concerning novelty and unobviousness, clearly places a burden of proof on the Patent Office which requires it to produce the factual basis for its rejection of an application under section 102 and 103 ...)

Id. at 1016. As was well explained by amicus Elan Pharmaceutical, the USPTO's representation that the ESD is merely "designed to assist the examiner in determining the patentability of the claimed invention" makes no sense. (Elan Pharmaceutical Brief at p. 14). Specifically, the USPTO's requirement that an applicant search the world and then explain in detail why each and everyone of its claims are patentable under the Patent Act is exactly the USPTO's obligation in the first instance (i.e., the USPTO is required to show unpatentability). Id. The fact that the USPTO has framed its Final Rules so that an ESD is required only upon an 17

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applicant exceeding an artificially-set USPTO claim limit, does not change the fact that in these cases the USPTO is shifting the burden (and its job) from the USPTO to the applicant. Shifting the burden of persuasion to prove patentability under Final Rules 1.75(b)(1) and 1.265(a)(1), (4)(5) are simply contrary to Sections 101, 102, 111, 131 and 151 of the Patent Act. Similarly, Final Rule 1.78(f)(2) further erects a presumption that claims in two (2) applications are not patentably distinct if the applications meet certain criteria. This ultra vires provision effectively eliminates the USPTO's statutory burden to make out a prima facie case of unpatentability because the presumption under the Final Rules is that claims in such applications are not patentable for double patenting. The USPTO may not simply unilaterally change its own duties in respect to processing patent applications and transfer them to patent applicants. Cf. In re Longi, 759 F.2d 887, 895-96 (Fed. Cir. 1985) (requiring that the USPTO make out a "prima facie case of obviousness" when issuing a double-patenting rejection). As indicated by IPO in its amicus brief, the USPTO intended §1.78(f)(2) to shift the responsibility of demonstrating double patenting away from the USPTO and to the applicant:
Therefore, with the benefit of §1.78(f)(2), double patenting issues could be resolved more expeditiously ... thus saving the examiner time by eliminating the need to search for related applications, analyze the potentially conflicting claims, and make the rejection.

72 Fed. Reg. 46780. The USPTO's unilateral shifting of its own statutory obligations onto the applicant is not only ultra vires, but also is inconsistent with law because it denies applicants several statutorily-granted rights, including, without limitation, the right under 35 U.S.C. § 133 to have at least thirty (30) days to respond to any rejection or other action, as well as the right of de novo reconsideration and review to the USPTO's Board of Patent Appeals and Interferences and to the courts granted pursuant to 35 U.S.C. §§ 134, 141 and 145. As such, a double

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patenting rejection triggered by the new presumption under Section 1.78(f)(2) improperly denies an applicant its right under the law to de novo review on appeal:
By casing all double-patenting rejections as procedural defects, the USPTO, with one blow, shed its own statutory duty to `reexamine' rejected applications and divests the Board of Appeals and the Federal Circuit of their statutorily-conferred jurisdiction to review double-patent rejections de novo.

IPO Amicus Brief at p. 17 (No.171).13 5. Patent Cooperation Treaty

Again, 35 U.S.C. § 2(b)(2) does not authorize the USPTO to engage in substantive rulemaking to set the conditions of patentability; to modify the Patent Act; or, to pass regulations that are inconsistent with the law, including U. S. Treaties.14 Section 706 of the APA specifically authorizes this Court to invalidate regulatory actions that are contrary to law or the Constitution. 5 U.S.C. § 706. The USPTO's citation to cases failing to reach the issue of whether a regulation violates a treaty, based on a presumption that the treaty was consistent with domestic law, does not help it. Isolated statements in a Congressional record to the effect that a treaty does not change "substantive requirements for obtaining a patent" have no weight in determining whether a set of regulations violate the treaty. The USPTO asserts that it "is improper for Dr. Tafas to suggest that the PCT could prevent the USPTO from altering its procedures." (USPTO Opp.

13

Lastly, as noted by amici CFPH, this purported burden shifting under the Final Rules not only violates the Patent Act, but also the Administrative Procedure Act, which provides that "[e]xcept where otherwise provided by statute, the proponent of a rule or order has the burden of proof." 5 U.S.C. §556(d). (See CFPH Amicus Brief at p. 19; No. 222). As USPTO's examiners issue adjudicatory orders, they are proponents of such orders.

Article VI, Clause 2 of the United States Constitution provides that treatises along with Constitution and Federal Laws are the "supreme Law of the Land." An executive branch agency cannot on its own volition violate a treaty entered into by the United States. Id. 19

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Mem. II at 39). Dr. Tafas asserts, however, that there is nothing improper in requiring the USPTO to follow the U.S. Constitution. In accord with both subsections of Article 4G of the Patent Cooperation Treaty (PCT), an applicant has the absolute right to divide a patent application to preserve the benefit of the priority date of the initial filing, whether based on an examiner's finding, or the applicant's own initiative. As noted by amicus Federation Internationale Des Conseils, while subsection (2) allows signatory nations to "determine the conditions under which such division shall be authorized," the European Patent Office itself has found that it confers no authority allowing signatories to restrict the number of divisional applications that an applicant can seek to file. Cf. Board of Appeals of the European Patent Office Case No. J 0011/91, at para. 3.1.1 (Aug. 1992) (Exh. B to their amici brief)(No.140). Furthermore as the ESD requirement is not among the exceptions to Article 27 of the PCT identified in Rule 51bis.1 PCT, imposition of the ESD procedure on patent applicants filing under the PCT is prohibited under Article 27 PCT. The USPTO's argument that the list set forth in PCT Rule 51bis.1 was not meant to be exhaustive, given the use of the phrase "in particular" in PCT Rule 51bis.1 is not persuasive given that the USPTO's ESD requirement parallels none of the exceptions to Article 27.15 Further, the USPTO's recitation to Rule 51bis.1 for the statement that "national law may require that the applicant furnish evidence in respect of any substantive condition of patentability prescribed by law" again misses the point. (USPTO Opp. Mem. II at pp. 41). While the provision allows for an office to require evidence of patentability to be supplied by an applicant once a prima facie case of unpatentability has been made by a signatory, it is not designed to require that an applicant prove patentability by doing a
15

The USPTO's recitation to proposed amendments to the PCT in footnote 27 of USPTO's Opp. Mem. II p. 40 also simply carries no weight. 20

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worldwide search of the literature available, and then arguing patentability on each point, as is required by the ESD requirements of the Final Rules.16 The USPTO attempts to dodge Dr. Tafas' assertion that the Final Rules violate the Patent Cooperation Treaty ("PCT") by raising an argument that Tafas did not specifically mention the PCT in his Amended Complaint. Again, the Amended Complaint adequately put the USPTO on notice, consistent with FRCP 8, that Dr. Tafas is claiming that the Final Rules are contrary to law (which, of course, is inclusive of treaties). Moreover, if deemed necessary, Dr. Tafas begs leave to amend his complaint and/or to conform it to the proof as authorized by FRCP 15(a) and (b). (See, infra, p. 11-12 n. 9). 6. 35 U.S.C. § 121

35 U.S.C. §121 was enacted by Congress to protect applicants against USPTO reversals in determining whether claims are patentably distinct. See, Studiengesellschaft Kohle mbH v. Northern Petrochemical Co., 784 F.2d 351, 361 (Fed. Cir. 1986) (the statute "effects a form of estoppel that shields the applicant from having to prove the correctness of the restriction requirement in order to preserve the validity of the second patent"). Section 121 is plain on its face that its drafters understood that there was another type of divisional application, one that was not a result of a restriction requirement, available to applicants. With this knowledge, Congress specifically tailored protection to those "issuing on an application with respect to which a requirement for restriction ... has been made." Id. That is, the other type of divisional, known in the art as a "voluntary divisional," was not to be given the special protection against

Additional supporting arguments as to how the Final Rules violate the PCT are found in the amici briefs of Federation International (pp. 3­4)(No. 140) and Robert Lelkes (pp. 2­8)(No. 225). 21

16

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"patentably distinct" reversals as one where there was "a requirement for restriction." The Final Rules improperly restrict applicants' rights to file the other type of divisional under Section 121. Furthermore, Section 1.78(f)(2) of the Final Rules circumvents the protection provided to applicants filing a divisional application pursuant to a restriction requirement, by applying a presumption of patentably indistinct claims between a divisional application which will share the same disclosure, filing date, and presumably inventorship and ownership, with its respective parent application. By allowing the USPTO to presume that the claims of a divisional application are patentably indistinct from its parent applications, the Final Rules overcome the very basis for the passage of 35 U.S.C. § 121. Under the Final Rules, an applicant filing a divisional application must demonstrate that its claims are patentably indistinct even to merit the protection of 35 U.S.C. § 121. This is simply not permissible under the statute. 7. 35 U.S.C. § 122

First, the USPTO seeks to duck Tafas' arguments concerning the ultra vires nature of the Final Rules in respect of 35 U.S.C. § 122 by arguing that they are outside the scope of the Complaint. (USPTO Opp. Mem. II at pp. 5-6). Again, Dr. Tafas' complaint adequately apprised the USPTO of Dr. Tafas' position and, even if it did not, any technical defect should be curable by amendment. (See Amended Complaint, p. 18, ¶ 56(h)). Second, the USPTO's standing argument again shows a failure of the USPTO to appreciate the entire facial basis of the APA challenge in front of this Court. Instead of dealing with Tafas' assertion that provisions of the Final Rules are inconsistent with 35 U.S.C. § 122, the USPTO tries to avoid squarely addressing the problem by linguistic twists such as stating that the problem Tafas points out is an "unlikely hypothetical," or merely "speculation." The USPTO suggests that an applicant has an available alternative "to keep certain information about the second application out of the publicly-available file by filing a `petition to expunge.'" (USPTO 22

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Opp. Mem. II at p. 6). Even assuming arguendo that this "alternative" somehow could operate to partially mitigate the loss of statutory rights, the Final Rules are still inconsistent with law because Section 122 requires the "Pat