By Donald Zuhn --
Yesterday, we reported
on the Patent Office's publication of a Notice in the Federal (73 Fed.
Reg. 32559) requesting that interested members of the public comment on
the Office's estimates for any additional burdens imposed on applicants
by the new appeals rules. In a departure from recent Patent Office
practice, the Notice was published in the Federal Register but not on
the Office's website, and in a departure from standard rulemaking
procedure, the Notice was published on June 9, 2008, only one day
before the appeals Final Rule Notice was published.
Following yesterday's report, David Boundy (at left), the Vice President of
Intellectual Property for Cantor Fitzgerald L.P., wrote us to provide a
few additional details regarding the USPTO rulemaking process. With
respect to the differences between Executive Order 12866 and the
Paperwork Reduction Act (PRA), Mr. Boundy noted that the former
requires an agency to account for all of the economic effects resulting
from any rules changes, while the latter addresses only the costs
relating to the gathering, organizing, storing, and submitting of
information (i.e., the "paperwork" burden). Mr. Boundy noted that over
the past two years, the Patent Office has failed to recognize this
distinction, and as a result has frequently failed to account for all economic
burdens in its E.O. 12866 analyses.
Under E.O. 12866 (as well as a third agency rulemaking mandate, the
Regulatory Flexibility Act), the Patent Office must account for any
loss of, or reduction in, patent value or business investment that would
result from a particular rules change. In particular, the Office is
required to submit all rules changes that have a greater-than-zero
economic effect to the Office of Management and Budget (OMB) after
writing the first draft of a Notice of Final Rulemaking, and then give
the OMB a 90-day period in which to review the rules changes. Once the
90-day period has passed, E.O. 12866 has no further impact on a
particular rules package.
The PRA, on the other hand, creates a continuing obligation to analyze the paperwork burdens of a particular rules package. Mr. Boundy noted that the claims and continuation rules -- which were permanently enjoined on April 1st in Tafas/GSK v. Dudas -- are being held up at the OMB on the basis of this continuing obligation. So, even if the Patent Office is successful in its appeal, it will have to confront a patent community that is better prepared to argue excessive paperwork burdens.
Mr. Boundy pointed out that the Patent Office at present lacks the authority to enforce its new appeals rules because it has not yet received the OMB's blessing under the PRA (as indicated by the "OMB Control Number" that appears on most PTO forms). Mr. Boundy noted that the Patent Office's obligations under the PRA are not too imposing -- the Office need only fairly and accurately account for the paperwork burdens imposed by a particular change in the rules. After the Office has complied with this obligation, its up to the OMB to either sign off on the rules changes or let the Office know that the rules changes create an excessive paperwork burden.
With respect to the new appeals rules, Mr. Boundy suggests that the Patent Office has used a two-fold strategy to evade proper E.O. 12866 review by first concluding that the new appeals rules were not economically significant (thus sidestepping its obligation to "show its work" with regard to economic impact), and then by delaying its PRA review until now.
To those interested in submitting comments to the Patent Office in response to the June 9th Notice, Mr. Boundy advises that appropriate subject matter would include an evaluation of the fairness, objectivity, and reliability of the estimates in the Notice. In particular, comments should focus on issues where the estimates in the Notice breach the requirements of the PRA (specifically the requirements set forth in 5 C.F.R. § 1320.8, .9, .11, and .12) or contravene the Office's own Information Quality Guidelines, which establish the ground rules for the Office's own PRA analysis (and which can be found here).
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