Tafas v. Kappos: Cleaning Up

Tafas & GSK v. Kappos (Fed. Cir. 2009) (En banc order)

After a two-year battle and under the new leadership of David Kappos, the PTO recently withdrew its proposed rules package that would limit the number of continuation applications and the number of claims-per-application. The PTO also asked that the Federal Circuit dismiss the now moot appeal and also vacate the district court judgment. All parties supported the dismissal, but Tafas opposed vacatur. The district court decision included strong language limiting the scope of PTO power, and vacatur would essentially eliminate that district court decision from the books.

In an en banc order, the Federal Circuit has now granted the dismissal, but denied the motion for vacatur. Following the Supreme Court’s 1994 Bancorp Mortgage decision, the Federal Circuit held that vacatur is not appropriate when the “mootness” of an appeal “is due to a voluntary act by the losing party, such as a settlement.”

“[This] is a case in which the agency itself has voluntarily withdrawn the regulations and thus set the stage for a declaration of mootness. The motion’s statement that an intervening regulatory change is directly analogous to an intervening statutory change is not persuasive. The agency does not control Congress; but it does control the decision to rescind the regulations. Thus, it was the USPTO (the losing party in the district court action) that acted unilaterally to render the case moot, and vacatur is not appropriate

Denial of vacatur also provides Tafas with the opportunity of demanding recoupment of its costs under Fed. R. Civ. Pro. R. 54.

55 thoughts on “Tafas v. Kappos: Cleaning Up

  1. So we go back to continuation abuse and claim-everything-potentially-vaguely-related abuse.

    While the proposed rules were clearly the wrong way to address these problems, has anyone got better suggestions?

    In the spirit of wild ideas, perhaps a rule that a board of senior patent examiner should be able to prohibit an applicant from applying for patents, or a law firm from assisting an applicant with the patent office, if they’ve shown a record of abusing the process?

  2. When the fees go up, don’t forget assigning blame to Dudas. No only did he press for these rule changes resulting in all this frivolous and costly litigation, he ordered the entire examining corps to undergo training in preparation for compliance with these rules. How much money was squandered there? He never seemed to be very popular among the examiners, instead being viewed as just another unqualified hack put into a political post to satisfy some constituency. The examiners want and deserve a professional with real qualifications as their commissioner which would also rule out Peterlin.

  3. FC: “panels in EDVA would have to follow Judge Cacheris’ holdind”

    I realize you did not mean there are “panels of judges” hearing cases at the district court house in Alexandria. 6 made some comment about staring at decisions or something like that, which nonetheless would appear to be the governing law (“lawl?”) at this point for any rematch (unless Dr. Tafas still has an app pending and still wants to cage fight the government).

  4. 1. At the CAFC itself, a first panel decision on a new question of law is binding on all subsequent panels until overruled by the court sitting en banc. I don’t know if the same rule applies at the EDVA, but if so, leaving the Cacheris decision in place would mean that all subsequent panels in EDVA would have to follow Judge Cacheris’ holdind, making it easier to find USPTO rule-making to be substantive. Since, as I understand it, administrative law suits against the USPTO need to be filed in the EDVA – the district in which the USPTO is located – the non-vacatur of the Cacheris decision ties the USPTO’s hands. This may have been calculated on Kappos’ part, as he lobbies Congress for clear, statutory-based, substantive rule-making power – now he can say that his hands are tied.
    2. Did Lourie not participate in the en banc order b/c he’s former general counsel for SmithKlineBeecham (the predecessor of GSK)?

  5. Dear Curious:
    Would it not be a taking if the USPTO acted in a dilatory fashion such that a patent did not issue until after the technology had advanced beyond the usefulness of the claimed invention?

  6. 6,

    The implications of your thoughtlessness are really astounding.

    Do you EVER pause to think before hitting that enter key?

  7. “…stick around Dr. Tafas – we may need you yet again.”

    Don’t worry NAL, if they want to make some rules and his being alive is the only thing stopping them, well, life is a fragile thing.

  8. Joe,

    Your point is correct. At the same time, as between (1) a district court decision and (2) a panel decision of a court of appeals reversing said district court decision, normally one would expect the panel decision to be given great weight and the district court decision given none. The result of the PTO’s shooting-self-in-foot legal strategy is that it is precisely the opposite. The district court decision is now apparently to be given “great weight” (even if not binding), and the panel decision is to be given none.

  9. Also, in Harris v. Martin, 834 F.2d 361, 365

    “It is true that in United States v. Mendoza, 464 U.S. 154, 78 L. Ed. 2d 379, 104 S. Ct. 568 (1984), the Supreme Court distinguished between the [**14] government and private litigants in refusing to allow the use of an unappealed district court judgment as a basis for a nonmutual, offensive collateral estoppel against the government. But the issue in Mendoza was whether the government’s failure to appeal an adverse district court judgment would redound to the benefit of a litigant in a subsequent case. The Court was careful to point out that its holding took nothing away from the finality of the judgment as between the parties to the original suit:
    The Government of course may not now undo the consequences of its decision not to appeal the District Court judgment in the [original] case; it is bound by that judgment under the principles of res judicata. [*366] But we now hold that it is not further bound in a case involving a litigant who was not a party to the earlier litigation.”

    However, a caveat in the Tafas case: “Because this case involves the legality of the Final Rules, a determination of their validity does not turn on facts unique to a particular plaintiff or on any disputes regarding such facts” Tafas v. Dudas, 541 F. Supp. 2d 805, 808

    – does this statement open the gates to any plaintiff? If yes, the Office may still be dead in the water, if no…
    …stick around Dr. Tafas – we may need you yet again.

  10. fisher ames,

    The Mendoza case is indeed powerful, but not bullit proof. I am following a line where the government did not succeed (disability benefit determinations) where the type of offense may have a strong parralel (abuse of power).

    Besides the point that the lifeless eyes eventually met their demise, I will have to reflect on my position!

  11. NAL: don’t get your hopes up. iirc from admin law, offensive nonmutual collateral estoppel does not extend to federal government agencies. Mendoza, SCOTUS (1984).

    “…he’d start poundin’ and hollerin’ and screamin’ and sometimes the shark would go away. Sometimes he wouldn’t go away. Sometimes that shark, he looks right into you. Right into your eyes. You know the thing about a shark, he’s got…lifeless eyes, black eyes, like a doll’s eye.” Quint (1976)

  12. Joe,

    Thank you for the excellent (and substantive) cites on precedence.

    What is your position on stare decisis, being that the losing party (regardless of jurisdiction) is enjoined from attmpeting that which has been ruled upon?

  13. “The trial judge’s decision stands, but it isn’t precedent; it doesn’t create a legal rule that the E.D. Va., or any other court, is bound to follow in analyzing the validity of a PTO rule in a future case.”

    Please do inform us when any of Judges Brinkema, Lee, O’Grady, or Ellis “fix” Senior Judge Cacheris’ ruling. Otherwise, I advise forum shopping in the meantime; it’s the american way (make those courts compete for business, etc.).

  14. Look guys, Noise thinks that Staring Decisionis will prevent further rule making, or at least one that would limit claim numbers/RCE’s etc. like the old rules. I’m not so sure that is quite how things will work out.

    What we need is for Arti to go ahead n chime in.

  15. I think what hotelingexaminer is trying to say is that it isn’t statute. This is usually what the lay public mean by a ‘law’, but it isn’t what is meant by a ‘law’ in the law.

    – and I’m just a patent agent!

  16. “WRONG. Since the vacated panel decision is non-existent, there is no compromise. The Cacheris Rule is Law.”

    I know I’m just nitpicking and doing so because I’m bored, but if the rule were “law” wouldn’t it be the Cacheris Law, not the Cacheris Rule? Rules clearly aren’t law.

  17. What I actually feel bad about with this whole process, is it really screwed some applicants over. The concern about having too many applications within a single family caused at least 1 attorney on a series of related cases I worked (am working) on to voluntarily delete his priority to parent applications (stupid, I know, considering good art existed between the filing dates of the parent and child applications). That basically opened him up to rock-solid 102’s (yes, solid 102’s do exist). If not for the proposed package, and the urgency to react, the guy would now have allowances instead of abandonments.

  18. Just one more example – an exceptionally clear one.
    “The general rule is that a district judge’s decision neither binds another district judge nor binds him, although a judge ought to give great weight to his own prior decisions.” McGinley v. Houston, 361 F.3d 1328, 1331 (11th Cir. 2004).

  19. The trial judge’s decision stands, but it isn’t precedent; it doesn’t create a legal rule that the E.D. Va., or any other court, is bound to follow in analyzing the validity of a PTO rule in a future case. This is so for the simple reason that district court decisions aren’t controlling precedent, ever. For example, the Federal Circuit explained it this way in 2001:
    “judges of a unified federal district, such as the judges on the Court of International Trade, are not constitutionally or legally bound to march in lockstep. The responsibility for maintaining the law’s uniformity is a responsibility of appellate rather than trial judges. Moreover, a judge should be able to depart from the holding of a brother judge of the same district if he is convinced through independent analysis that the holding of his colleague is incorrect.”
    American Silicon Technologies v. United States, 261 F.3d 1371, 1381 (Fed. Cir. 2001) (citations omitted).
    There are a number of circuit court of appeals decisions to the same effect, from different circuits (3rd, 7th, DC). But this Federal Circuit decision illustrates the point.

  20. “because the USPTO might just be facing a takings action under the Fifth Amendment.”

    explain further, Ken, please.

  21. Well the Director better recondiser slowing down RCEs in pending patent applications, because the USPTO might just be facing a takings action under the Fifth Amendment.

  22. Now that’s funny, FB.

    O’ course; as we all know; the best jokes have at least a kernel of truth to them … you know; like this one.

  23. Wasn’t it a joint motion? What was the reason for denying it as to GSK? I don’t think the court explained that.

  24. “He should have argued that there were circumstances beyond the PTO’s control, specifically, the loss of a leader with balls.”

    Let me remind you that 6 used to brag about “working out” next to the former leader, so he presumably has at least a partial basis for this statement.

  25. I would just like to say “Eat that Nikki, your crappy soap box didn’t make the top 10 inventions of 2008, FIFTEEN, count em’ FIFTEEN, years after our fair when my invention was recognized!”

  26. FB’s “I was reading this article on the 50 best inventions of 2009 and thinking how Malcolm would find that none of them is patentable.” got me wondering…is an invention an invention if it can’t be patented?

  27. “1. The Retail DNA Test”

    Product.

    “2. The Tesla Roadster”

    Apparatus

    “3. The Lunar Reconnaissance Orbiter”

    Apparatus.

    “4. Hulu.com”

    102b, already had tv shows online (even with commercials). probably software per se.

    “5. The Large Hadron Collider”

    Apparatus. Probably “invented” 20+ years ago, just now being built.

    “6. The Global Seed Vault”

    A room? I thought this was a list of “inventions”. This is more like a list of “impressive things that have just been accomplished lately”. Pretty sure a room is not patentable subject matter, although it may be an apparatus.

    “7. The Chevy Volt”

    Apparatus.

    A good many of those “inventions” aka. “impressive things” to the people at TIME are patentable. When do we start getting to the ones that aren’t?

    “9. The Orbital Internet”

    Near and dear to my heart. Invented that one myself (with my dad’s “help” lol) for an invent fair in 5th grade. Nobody was especially impressed there, a girl who made a box that you put the remnants of soap you’ve used in, and then squish them together to make a new bar of soap won (how gross the created bar is was never tested I don’t think). I may have got an “honorable mention” but I doubt it.

    Still have my prototype probably, a globe with a band of plastic coated metal in geosynch orbit around it. We may have trashed the band of metal after the invent fair. Of course, it seems like they’re going wireless with their embodiment. Oooo!

  28. “…handcuffed itself in future rulemaking,”

    Say what??

    As long as the PTO sticks to its bailywick, avoids ultra vires forays, and makes only non-substantive rules – with all the other requisites, such as adequate notice and comment – they can make rules all day long.

    Its called Administrative Procedure – check into it.

  29. “6K, my guess is Director Kappos knows how to use the law astutely and courageously.”

    Hahaahaha, such rich irony!

    I’ve rather missed ya RA. There are few amongst these noobs that can tell a joke quite like you.

    “Well done, Director Kappos. The eunuchs are screaming.”

    Again with the irony! Oh you kidder!

  30. Noise – Take your pick from Bobby Fuller, The Clash or Green Day – “I fought the Law and the Law won”.

    Good point, except for the glaring omission of Mike Ness from your list.

  31. 6K, my guess is Director Kappos knows how to use the law astutely and courageously. And while he understood what he was doing, those who would pervert the law are always caught by it, unawares.

    Now there’s power.

    Well done, Director Kappos. The eunuchs are screaming.

  32. “that has already been seriously compromised”

    WRONG. Since the vacated panel decision is non-existent, there is no compromise. The Cacheris Rule is Law.

    “All of which was entirely foreseeable at the time of the settlement.”
    But TJ, you are forgetting about the “Boundy Point”. Even passing an En Banc decision point, the rules were going to be stillborn for violating OBM rules. Cheaters never propser.

    “are PTO attorneys really so incompetent or uncaring”
    TJ – See the “Boundy Point”, mentioned above.

  33. “Even if Kappos wanted to rescind the rules package, are PTO attorneys really so incompetent or uncaring about their turf that they couldn’t persuade him to hold off until after the case is decided, or ask the en banc court to reinstate the panel decision first?”

    Apparently.

  34. Plurality (do I know you?), don’t applicants always bear the cost of changing the patent system by paying for activities of the PTO? How do you put a dollar value on the IP rights that might have been lost if the rules were put into effect? Also, the cost of one legal case is insignificant to the PTO (and therefore its customers).

  35. Few things to note:

    1. The order is precedential, but the issue is pretty straightforward, so if any PTO attorneys thought they could get vacatur they were dreaming.

    2. The panel opinion, however, stands vacated. It is the district court opinion that has already been seriously compromised (by having a panel overrule it) that stands as citable precedent.

    3. Thus, by voluntarily entering the settlement, the PTO appears to have brilliantly (a) ensured its own defeat while on the cusp of victory, (b) handcuffed itself in future rulemaking, (c) handed Tafas his fees, and (d) thrown away a moderately favorable panel precedent. All of which was entirely foreseeable at the time of the settlement.

    Even if Kappos wanted to rescind the rules package, are PTO attorneys really so incompetent or uncaring about their turf that they couldn’t persuade him to hold off until after the case is decided, or ask the en banc court to reinstate the panel decision first?

  36. “Denial of vacatur also provides Tafas with the opportunity of demanding recoupment of its costs under Fed. R. Civ. Pro. R. 54.”

    I wonder if that bill can be forwarded to former PTO directors?

    /sarcasm off

  37. “anguish and torment we in the patent bar (and our clients) went through ”

    The above statement is is not hyperbole. It may be understating the actual effect.

    I can recall literally hundreds of cumulative very high-priced man-hours of both in-house and outside counsel and staff, that went into futile attempts to understand and recommend strategies to address these ill-advised and, ultimately, ill-fated rules.

  38. “6 – cheer up – it’s the Law now – as losing party, the Office is foreclosed from attempting rules beyond their power per the Cacharis Rule. ”

    We’ll see Noise.

  39. He should have argued that there were circumstances beyond the PTO’s control, specifically, the loss of a leader with balls.

  40. Justice finally prevailed here. But at what cost, including the wasted time, anguish and torment we in the patent bar (and our clients) went through tryng to cope with potential implementation of these rules. And a tip of my hat to Tafas and their counsel for seeing this through to the end, including not caving in on allowing Cacheris’ sound decision to be vacated.

  41. “…voluntary act by the losing party”

    “…the losing party”

    compare to “When the fees go up, just remember that a little bit of that comes from Tafas’s lawyers raiding the piggybank.”
    – excuse me, but it was the Office that decided to go on this little venture in illegal power grabbing and how much did they spend? “raiding the piggybank” as you put it to properly pay those who pursued and upheld justice shows the continued lack of respect for the Law. And you want to blame the guy that stood up to the injustice? Oh wait – that’s right – you blame inventors for the backlog as well. You really need to consider another line of work.

    6 – cheer up – it’s the Law now – as losing party, the Office is foreclosed from attempting rules beyond their power per the Cacharis Rule. I wonder if I should bring up all those bookmarked pages of you and your fellow examiner Malcolm predicting triumph.

    Take your pick from Bobby Fuller, The Clash or Green Day – “I fought the Law and the Law won”.

  42. “”[This] is a case in which the agency itself has voluntarily withdrawn the regulations and thus set the stage for a declaration of mootness. The motion’s statement that an intervening regulatory change is directly analogous to an intervening statutory change is not persuasive. The agency does not control Congress; but it does control the decision to rescind the regulations. ”

    He actually argued that? Je sus.

  43. When the fees go up, just remember that a little bit of that comes from Tafas’s lawyers raiding the piggybank.

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