http://tinyurl.com/27udd8

Court Issues Injunction
Blocking New Patent Rules

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. 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.

GlaxoSmithKline, which filed its suit against the PTO and its director, Jon Dudas, earlier this month, will now file a summary-judgment motion asking the court to block the new rules permanently, Mr. Desmarais said. The PTO will also file a summary-judgment motion arguing against a permanent injunction and for the rules to be implemented, he said. The judge will then hear oral arguments and make his decision, Mr. Desmarais said. The case will likely be argued early in the new year.

"I think GSK's position in this case is very strong on the merits and we're very pleased that the court has come out the way it did because we think we're going to be ultimately successful at the summary-judgment hearing," Mr. Desmarais said.

Officials from the PTO weren't immediately available for comment.

The case is being heard by Judge James Cacheris in the U.S. District Court for the Eastern District of Virginia. It was consolidated with another case challenging the new rules filed in August by Triantafyllos Tafas, a Connecticut inventor. Before Wednesday's decision, Judge Cacheris had decided four cases challenging the PTO's authority and sided with the PTO every time, according to an email from a patent lawyer following the case.

Several groups and companies, including the American Intellectual Property Law Association (AIPLA) and Elan Corp., had filed amicus briefs in support of GlaxoSmithKline. David Kappos, assistant general counsel, intellectual property law at International Business Machines Corp. has filed a declaration in support of the AIPLA brief.

The battle over the new continuation rules comes as the U.S. Senate readies to vote on a controversial patent-reform bill designed to curtail the power of patent holders. Among other things, the bill would reduce damage awards for infringement, limit venue choice in patent litigation and create a new way of challenging a patent's validity after the patent has been approved.