UPDATE 1-Patent office drops rules that sparked Glaxo lawsuit

WASHINGTON Oct 8 (Reuters) - The U.S. Patent and Trademark Office has dropped regulations that sparked a lawsuit by GlaxoSmithKline (GSK.L) and the two sides have asked a court to dismiss the suit, the patent office said on Thursday.

During the Bush administration, the Patent Office had set rules aimed at limiting the size of patent applications in hopes of reducing the time it takes to grant or reject a patent, now at about three years.

But Glaxo and other companies objected and sued the office seeking that the rules be overturned.

"These regulations have been highly unpopular from the outset," said Patent Office head David Kappos in a statement announcing that the rules were being rescinded.

Glaxo had fought the rules on the grounds that they were substantive, and beyond the scope of the patent office to change unilaterally.

The rules had been designed to force companies to submit shorter patent applications, but a decision to make those rules retroactive prompted fears from companies like Glaxo that they would have to refile applications that exceeded the new limits.

The rules were set aside during the court fight.

The rules included a limit on the number of claims that an inventor can make in support of a patent as part of the Patent and Trademarks Office effort to cut the size of applications, which can consist of two dozen boxes of documents.

Another change would have put limits on "continuations," procedures that allow inventors to make follow-up filings.

Glaxo was supported in the lawsuit by the American Intellectual Property Law Association, Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization.

The case is: Tafas v. Kappos, No. 08-1352, U.S. Court of Appeals for the Federal Circuit. (Reporting by Diane Bartz)