Court Issues Injunction Blocking New Patent Rules

Wall Street Journal ^ | October 31, 2007 3:18 p.m. | STUART WEINBERG

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A Virginia court granted GlaxoSmithKline PLC's request for a preliminary injunction blocking the U.S. Patent and Trademark Office from implementing new rules that the pharmaceutical giant says will cause it "and other innovative companies like it" irreparable harm.

"It's a good day for innovators in this country because the new rules would have stifled innovation," GlaxoSmithKline's lawyer, John Desmarais, said.

The proposed rules, which were scheduled to go into effect Thursday, reduced the number of times a patent applicant could contest or amend rejected or pending patent claims. Previously, applicants could file an unlimited number of amendments or challenges, known in industry parlance as continuations. Under the new rules, applicants had the right to file two continuations, but anything above that would have to be accompanied by an explanation justifying the
request.

Continuations are considered an important tool by patent applicants, particularly in the pharmaceutical industry, because new information about an invention often comes to light after the initial patent application has been filed. This information can be added to the application via a continuation, allowing the applicant to retain the original filing date, which is critical in the ultra-competitive pharmaceutical and technology sectors.

The PTO wants to limit the number of continuations to help make the patent-application process more efficient and to reduce its massive application backlog. Continuation requests accounted for nearly 30% of all patent applications in 2006, up from 27% in 2005 and 25% in 2004, according to the PTO. The patent-application backlog is 750,000.

Critics of the existing system also note that many companies use continuations to delay introduction of a product, monitor market developments and then modify their patents to take advantage of emerging trends.

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On the flip side, opponents of the new rules said the rules are unclear, would stifle innovation and would make it more expensive for small companies and individual inventors to patent their inventions.

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Earlier FR thread:

House Approves Comprehensive Patent Overhaul
The Washington Post ^ | September 8, 2007 | Catherine Rampell

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The House yesterday passed the most comprehensive patent reform in half a century, delivering a victory for computer technology and financial services companies and leaving drug companies, small inventors, and the U.S. Patent and Trademark Office bracing for a bigger fight before the bill hits the Senate floor.