UPDATE:Appeals Court Revives Some Patent Rules Attacked By Glaxo
March 20 2009 - 3:59PM
Dow Jones News
In a potential setback for the pharmaceutical and biotechnology
industries, a federal appeals court Friday revived certain
controversial new rules aimed at curbing abuse of the U.S. patent
system and reducing the backlog of unexamined patent
applications.
The mixed court ruling upheld some of the rules changes adopted
by the U.S. Patent and Trademark Office in 2007.
GlaxoSmithKline PLC (GSK) and an independent inventor challenged
the rules before they went into effect, arguing that Congress had
not given the patent office the authority to make substantive
changes to the patent process.
Glaxo, backed by the pharmaceutical and biotechnology
industries, said the rules would undermine patent rights that
encourage firms to take significant financial risks in developing
new drugs.
A federal trial judge in Virginia sided with Glaxo in 2007 and
invalidated the rules, but the U.S. Court of Appeals for the
Federal Circuit on Friday overturned much of the trial judge's
decision.
In a 2-1 ruling, the Federal Circuit upheld a patent office rule
that would require an inventor who makes a large number of claims
about what a patent covers to provide detailed information on why
the invention is eligible for patent protection.
The appeals court also upheld a new rule that would limit the
number of times a company or inventor can request a re-examination
of a rejected patent application.
The Federal Circuit, however, struck down a patent office rule
that would have limited the number of times an inventor can file a
patent "continuation," the process used to amend a patent
application.
The patent office has said its new rules would stop
opportunistic patent applicants from flooding and abusing the
system.
An array of consumer groups and law professors supported the
patent office in the case, saying the current patent system creates
uncertainty in the marketplace and makes it all too likely that
dubious patents will eventually be approved.
Friday's ruling sent the case back to the trial judge for
further study. The appeals court said Glaxo still has the
opportunity to make different legal arguments against the new
patent rules.
Bradley Wright, a Washington patent attorney with Banner &
Witcoff, said the ruling could have a significant negative impact
on pharmaceutical, biotechnology and chemical companies, which
frequently file patent applications that contain a large number of
claims.
"It will increase the cost of filing for new patents," Wright
said.
Glaxo said in a statement that it is reviewing the decision and
assessing its options. The company said it was pleased the court
found one of the rules invalid but disappointed in other portions
of the decision.
The patent office did not return a call for comment.
The top trade associations for the pharmaceutical and
biotechnology industries had filed friend-of-the-court briefs
supporting Glaxo. General Electric Co. (GE), Elan Corp. (ELN) and
Monsanto Co. (MON) also supported the drug maker.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222;
brent.kendall@dowjones.com