Posted in: U.S. Court of Appeals For The Federal Circuit
PROSECUTION LACHES IS A DEFENSE AVAILABLE TO THE PATENT AND TRADEMARK OFFICE
By: Gene M. Garner II, Partner
In a June 1, 2021 opinion in Gilbert P. Hyatt v. Andrew Hirshfeld, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent Office, Case: 18-2390, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) held that prosecution laches is a defense available to the Patent and Trademark Office (“PTO”) in an action to obtain a patent under 35 U.S.C. §145.
Inventor Hyatt had brought an action in the U.S. District Court for the District of Columbia seeking issuance of patents by the PTO on four pending applications.
The PTO filed a motion to dismiss and argued that Hyatt had engaged in a “pattern of delay in prosecuting his nearly 400 patent applications from 1969 through the present day”.
The issue before the Federal Circuit was whether the PTO could raise the equitable defense of laches in response to Hyatt’s action to issue patents by the PTO.
The Federal Circuit reviewed both Hyatt’s and the PTO’s actions related to the prosecution of Hyatt’s nearly 400 patent applications, even though Hyatt had brought an action seeking issuance of only four patent applications filed during the so-called “GATT Bubble”. The “GAT Bubble” refers to the large number of patent applications filings in the spring of 1995 leading up to June 8, 1995 when changes in U.S. patent laws to publish pending patent applications and to measure the term of a U.S. patent as 20 years from the earliest non-provisional U.S. filing date became effective.
The instant case involves four of Hyatt’s patent applications related to computer technologies filed during the “GATT Bubble” and claim priority to applications filed in the 1970s and 1980s (12 – 25 years earlier). Hyatt’s GATT Bubble applications eventually contained an average of 300 claims per application.
The PTO created an art unit specifically to examine Hyatt’s applications and issued 11 notifications to Hyatt called “Requirements”, each Requirement corresponding to a set of applications that shared a common specification belonging to one of the GATT Bubble applications’ 11 parent applications.
Moreover, the PTO’s position was that the number of pending claims (115,000 total claims, including 45,000 independent claims, across all applications), the claim of priority to numerous applications, the lengths of the specifications, and the large amount of repetition and redundancy of claims across applications posed a “significant hurdle to processing the applications” by the PTO. The” PTO estimated that it would take 532 years of examiner time at the then-current rate to process Hyatt’s applications”. Therefore, the Patent and Trademark Office instructed Hyatt to (i) select no more than 600 total claims to pursue for each of the 11 specifications, (ii) identify the priority date and support for that date with respect to each chosen claim, and (iii) submit a clean copy of the claims.
The Federal Circuit relied on Cancer Research, 625 F.3d at 728 to assert that “[T]the doctrine of prosecution laches is an equitable affirmative defense”, and that “[P]prosecution laches ‘may render a patent unenforceable when it has issued only after an unreasonable and unexplained delay in prosecution that constitutes an egregious misuse of the statutory patent system under a totality of the circumstances’”. The Federal Circuit further asserted that the laches defense originates from two Supreme Court cases in the early 1900’s, Woodbridge v. United States, 263 U.S. 50 (1923), and Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924).
The Federal Circuit also provided examples in Symbol Techs., Inc. v. Lemelson Me., Educ. & Research Found., LP, 422 F.3d 1378, 1385 (Fed. Cir. 2005) (“Symbol Technologies II”) of “reasonable delay: (i) filing a divisional application in response to a restriction requirement, even if the filing occurs immediately before issuance of the parent application, (ii) refiling an application to present new evidence of an invention’s unexpected advantages, and (iii) refiling an application ‘to add subject matter in order to attempt to support broader claims as the development of an invention progresses’”, and unreasonable delays such as “repetitive refilings that demonstrate unjustifiable prosecution delay, for example ‘refiling an application solely containing previously-allowed claims for the business purposed of delaying their issuance’”.
Moreover, the Federal Circuit asserted that in Cancer Research Technology Ltd. v. Barr Laboratories, Inc., 625 F.3d 724 (Fed. Cir. 2010), the Federal Circuit held that “prosecution laches requires proving two elements: (a) that the patentee’s delay in prosecution was unreasonable and inexcusable under the totality of circumstances, and (b) that the accused infringer suffered prejudice attributable to the delay.”
While the Federal Circuit took into account delay in examining the Hyatt applications, in considering the totality of the circumstances, the Federal Circuit asserted that the district court failed to consider Hyatt’s “pattern of rewriting or shifting claims midway through prosecution in applications other than the four at issue in this case because that claim shifting ‘long postdate[d] the close of prosecution” of the four applications”, Hyatt’s pattern of prosecuting other applications not before the Court, the administrative burden placed on the PTO to examine Hyatt’s applications, and Hyatt’s filing of four claims already lost in interference proceedings.
Moreover, the Federal Circuit asserted that in the context of laches, the Federal Circuit has previously held that a delay of more than six years raises a “presumption that it is unreasonable, inexcusable, and prejudicial.” Wanlass v. Gen. Elec. Co., 148 F.3d 1334, 1337 (Fed. Cir. 1998), and “that presumption shifts the burden to the patentee to prove that ‘either the patentee’s delay was reasonable or excusable under the circumstances or the defendant suffered neither economic nor evidentiary prejudice’”.
In the instant case, the Federal Circuit held that, “in the context of a §145 action, the PTO must generally prove intervening rights to establish prejudice, but an unreasonable and unexplained prosecution delay of six years or more raises a presumption of prejudice, including intervening rights”. The Federal Circuit concluded that “the PTO’s demonstration of an unreasonable and unexplained delay by Hyatt, which exceeds six years by any measure, shifts the burden to Hyatt to prove lack of prejudice”.
Also in the instant case, the Federal Circuit held that “where a patent applicant has committed a clear abuse of the PTO’s patent examination system, the applicant’s abuse and its effects meet the prejudice requirement of prosecution laches”.
In the instant case, the Federal Circuit concluded that “the PTO has carried its burden of proving that Hyatt engaged – intentionally or not– in a clear abuse of the PTO’s patent examination system that contributed to delay in the four applications at issue”.
The Federal Circuit retained jurisdiction over the appeal with respect to the anticipation and written description issues, but remanded to the district court for the limited purpose of affording Hyatt the opportunity to present evidence on the issue of prosecution laches, consistent with the standards set forth in the Federal Circuit’s opinion.