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Legal Update

Federal Circuit Split on Controversial USPTO Rules Package

24 March 2009
Mayer Brown Legal Update

On March 20, 2009, a panel of the US Court of Appeals for the Federal Circuit issued a split decision in Tafas v. Doll regarding the US Patent and Trademark Office’s (USPTO) attempt to promulgate four new rules that would effectively limit the availability of requests for continued examination (RCEs) and continuations, as well as the number of claims in an application.  The Federal Circuit held that it was within the USPTO’s rulemaking authority to establish the new rules, as they were procedural rather than substantive.  However, the Federal Circuit held that limiting the number of continuations that an applicant may file conflicts with Section 120 of the Patent Act. The four rules at issue were as follows:

  • Rule 78 (Continuations): Allows an applicant to file two continuations or continuations-in-part as a matter of right.  To file more than two, the applicant would be required to file a petition “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application.”

  • Rule 114 (RCEs): Allows an applicant to file one RCE per application family as a matter of right.  As with Rule 78, to file more than one  RCE, the applicant must file a petition “showing that the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application.”

  • Rule 75 (Number of Claims): Limits an application to 25 total claims and 5 independent claims.  To submit more claims, the applicant would need to submit an examination support document (ESD) as detailed in Rule 265.

  • Rule 265 (ESDs): Sets forth the procedure to exceed the claims limits set by Rule 75.   Specifically, the applicant must conduct and submit a prior art search detailing the most relevant prior art, identifying the limitations disclosed by each reference, explaining how each claim is patentable over the reference, and showing where each limitation is disclosed in the specification.

Shortly after the rules were published, a suit was brought against the USPTO that resulted in a preliminary injunction against enforcement. The district court found that the rules were “substantive rules that change existing law and alter the rights of applicants,” and therefore the rules exceeded the USPTO’s jurisdiction because the USPTO lacks substantive rulemaking authority.  The Federal Circuit disagreed with the district court’s analysis, finding that the rules were merely procedural under JEM Broadcasting Co. v. FCC, 22 F.3d 320 (D.C. Cir. 1994), as they only governed “the timing of and materials that must be submitted with patent applications.”

The Federal Circuit determined that under Rules 78 and 114, applicants who present all of their “amendments, arguments , and evidence” as early as possible would be able to file as many continuations and RCEs as they needed.  Similarly, the court also found that Rules 75 and 256 only set forth a “facially reasonable procedural requirement” that complies with the Patent Act’s requirements that “applicants are expected to be forthright about their inventions.”  After determining that the rules were procedural and not substantive, the Federal Circuit  examined the rules in light of the Patent Act.

The Federal Circuit  held that Rule 78 conflicts with 35 U.S.C. § 120.  The court stated that because § 120 details the four exclusive requirements for filing continuations, adding a new continuation requirement through Rule 78 would conflict with the Patent Act.  However, the court found that the other three rules were in concordance with the Patent Act, and thus valid.  Finally, the Federal Circuit remanded the case back to the district court for further proceedings consistent with its opinion.

Judge Rader concurred in part and dissented in part with the majority opinion.  Judge Rader stated that he believed the new rules were substantive, not procedural, as they “affect individual rights and obligations, and mark a startling change in existing law and patent policy.”  He found that Rule 75 set an “arbitrary limit on the number of claims in an application,” contrasting with the Patent Act’s allowance of “one or more claims,” thus limiting the applicant‘s right and obligation to “particularly [point] out and distinctly [claim] the subject matter which the applicant regards as his invention.”  Furthermore, Judge Rader stated that Rules 75 and 265 are substantive, as each “shifts the burden of proving patentability onto the applicant.”  For these reasons, he would affirm the district court’s opinion.

The overall effect of the Federal Circuit’s opinion is uncertain.  The new rules would likely increase the burden and expense for applicants.  Not only would applicants be required to raise all potential arguments and amendments in the initial stages, leading to potential prosecution history estoppel problems, but they would also have to conduct and disclose full prior art searches.  Furthermore, the Federal Circuit acknowledged that the new rules would provide more fodder for inequitable conduct allegations as, under the new rules, “mistakes and omissions will inevitably occur, and that the courts will be asked to determine if there was inequitable conduct.”  However, in spite of these issues, the court stated that the “concern is too speculative” to invalidate the rules.  One positive note about the invalidation of Rule 78 is that applicants could potentially avoid the limits set in Rules 75 and 265 by filing additional claims in continuations.

The rules are not yet final; the district court must determine if the remaining rules are arbitrary and capricious, conflict with the Patent Act in other regards, are vague or retroactive, or exceed the scope of the USPTO’s rulemaking authority.  Also, the appellees will have an opportunity to petition for rehearing en banc.  Finally, even if the Federal Circuit does not revisit these rules after the district court’s opinion, it opened the door for future litigation on this matter by asserting that courts “will be free to entertain challenges to the USPTO’s application of the Final Rules .”

For more information about the topics raised in this Client Alert, please contact at +1 312 701 8979, or  at +1 713 238 2630.

Learn more about our Intellectual Property and Supreme Court & Appellate practices.


  • Sharon A. Israel
    T +1 713 238 2630
  • Joseph A. Mahoney
    T +1 312 701 8979

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