Injunction? Yes. Victory? Well...Stay Tuned
A week ago, Judge Cacheris of the District Court for the Eastern District of Virginia, preliminarily enjoined the U.S. Patent & Trademark Office (PTO) from implementing new PTO rules that would have restricted the number of continuations and continuation-in-part applications that can be filed in a patent family, as well as the number of claims permitted in any given application. The rules caused a great deal of tension among stakeholders, hype, unecessary CIP filings, constant predictions about injunctions, non-stop bloggings, and, of course, litigation, and all for good reason. So how did we get here, and where do we stand today? Read on...
The PTO had planned to implement new rules on November 1, 2007. As we now know, the rules caused nothing short of an avalanche of protest from the day the Notice of Proposed Rulemaking was published in the Federal Register, with nearly everyone finding something unpalatable in the rules. SmithKline Beecham Corporation (doing business as GlaxoSmithKline (“GSK”)), stepped up and sued the PTO, seeking both a preliminary injunction and a permanent injunction to prevent the new rules from going into effect. It would be fair to say that a rallying cry in support of GSK swept the patent world.
On October 31, 2007, in a packed courtroom, the Eastern District of Virginia considered (1) the likelihood of success on the merits by GSK, (2) the possibility of irreparable harm to GSK if the injunction is not granted, (3) the balance of hardships between the parties, and (4) the public's interest.
Under factor (1), the court found that each side had a likelihood of success at trial on the issues noted below. However, under factor (2), the court granted the preliminary injunction because it is likely that GSK would suffer irreparable harm if the preliminary injunction is not granted, namely of potentially losing valuable patent protection and incurring significant costs to comply with the Final Rules. And, under factor (3), the court determined that, though the hardship to the PTO for maintaining the status quo by deferring the effective date of the Final Rules is not nonexistent, the uncertainty and loss of investment suffered immediately by GSK tilts the balance of hardships in their favor. Finally, under factor (4), the court found that the public interest is most served by continuing the status quo and granting the preliminary injunction.
Thus, while there are some issues on which the PTO may ultimately prevail as this litigation proceeds to the next stage, the court found, as a preliminary matter, that there is a likelihood that the PTO has exceeded its authority at least on several of the Final Rules, so it granted GSK’s motion, thereby preliminarily enjoining the PTO from implementing the new rules (see PTO's statement about the litigation here).
In a poll conducted after the injunction issued, 92.8% of those who responded said that Judge Cacheris made the appropriate legal decision. See PLI's Patent Blog for in-depth coverage of the legal challenges to the PTO's new rules.
Since GSK’s challenge is a legal one, the next stage in this litigation will be for the parties to submit summary judgment motions. 
